Jack Janasiewicz on Economic Slowdown, Inflation, and AI Capex

Economic Indicators and Inflation

• 📈 The latest data suggests a slowing of the economy, with signs of inflation starting to emerge.
• ⚠️ A key concern is the spread between goods prices drifting higher due to tariffs and services prices disinflating, which could signal broader inflation if the goods side widens.

Labor Market Weaknesses

• 📊 The jobs report showed several weak points, including the employment-to-population ratio for the prime-age workforce, the labor force participation rate, and the job diffusion index, all indicating a weaker labor market.
• 📉 While there is weakness in the labor market, the question remains whether this trend will accelerate in the near term.

Consumption vs. AI Capex

• 🧠 A significant takeaway from Q2 earnings is that AI capex spend is currently outpacing consumption as a contributor to GDP.
• 🚀 This AI capex is the primary driver of current growth, and if it begins to slow, identifying the next engine for growth will be a major challenge.