Summary
AI investment is making the U.S. economy appear weaker on paper, even as businesses pour money into a rapidly expanding sector. The country’s trade deficit reached $119 billion in July, driven largely by a 48% annual increase in capital-goods imports, including data-center equipment, cooling systems, electrical gear, and chips. Because GDP calculations subtract imports, economists expect the surge to reduce third-quarter growth by more than a percentage point. However, the imports reflect strong business investment rather than economic weakness. Spending on AI infrastructure, solid consumer activity, and rising inventories indicate that underlying economic growth remains healthy despite misleading headline GDP figures.
Investopedia
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