I think of this graph as the most important graph for thinking about sustained AI related Capex spending:
Pecking Order and AI Capex Spending
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“Core GDP” and AI Related Imports and Investment Contribution to GDP
Following further on Jim’s assessment on slow but steady headline GDP growth, core GDP growth remains strong. But GDP growth relies on AI related investment spending.
Economic Sentiment Stabilizes
Michigan final sentiment and Conference Board confidence near pre War levels. But still 2.2 to 2.4 standard deviations below pre Trump. Gallup confidence 1.1 standard deviations below.
GDP continues modest growth
The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 1.5% annual rate in the second quarter. That is about half of the historical average growth of 3.1% and continues a record of slow growth over the last three quarters.
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AI Related Imports Flattens Out, Investment Decelerates
Approximately, as we don’t have direct observations on items solely related to AI.
Business Cycle Indicators at July’s End
Following up on Jim’s GDP asssessment, here’re NBER BCDC indicators plus alternatives. Consumption growth remains strong,
Real Yields Surging
TIPS 30 year yields up 55 bps since the War’s start; 10 year up 69 bps.
Advance June Capital Goods Imports vs. Prelim. May Computers, etc. Imports
Any hints on where AI related imports are going, given capital goods imports?
Estimates of Current Inventories of Patriot and THAAD Interceptors
From Cancian and Park at CSIS on 27 July:
Wednesday Morning Oil SitRep
Brent front month future back to $90, as SoH reopening down, Bab el Mandeb traffic estimates down … a bit before 8am CT.