The US Economy Is Putting All Its Chips Down On AI

 The United States economy is becoming more and more focalized on Artificial Intelligence. Both investment and market concentration are increasing and generating hope and fear amongst the market and economists. Seven major tech firms account for 32% of the total U.S. stock market value which highlights the dependency of the American economy on AI and its development by these firms. This past week Nvidia became the first company in the world to reach a $5 trillion market cap. To put in perspective, this one company represents 7% of all publicly traded U.S companies.

AI has seemingly propelled the United States economy away from a recession. AI research, development, and operation requires large scale data centers. Massive amounts of investment has funded this and several hundred billion more is expected in the next year. Concerns are rising, however, with many suggesting that this high concentration in the market and GDP may be creating a bubble. 

https://finance.yahoo.com/news/us-economy-putting-chips-down-203100569.html

Economy European Central Bank holds rates steady as economy shows resilience

  The European Central Bank (ECB) maintained its key deposit rate at 2% for the third consecutive meeting. This puts a pause on the rate-cutting cycle that has been going on since last year; these rates ran all the way up to a record high of 4% at that time. There was growth in the third quarter that was slightly above expectations at .2%. The growth was caused by the labor market, strong private sector balance sheets, and steady consumer spending. 

    During the meeting, the ECB highlighted uncertainties such as global trade tension, geopolitical risks, and a stronger EURO. President of the ECB, Christine Lagarde, described the current monetary stance as "a good place," indicating no grave concerns at this time. While there is still some fixing to do, she indicated the flexibility of the central bank depending on fluctuating economic conditions. While services and consumer-driven sectors are performing well, manufacturing continues to face pressure from tariffs and weakening external demand. Overall, the decision reflects cautious optimism as the easing cycle appears near its end, but the ECB will continue to monitor the data closely before making any further moves.

Article: ECB October 2025 rate decision

NIRS Research Supports the Significance of Social Security

 Recent research conducted from the National Institute on Retirement Security (NIRS) on social security revealed how important it really is and serves many purposes for our labor force. 

To be specific, the research found that in 2023;

1. $1.38 trillion in benefits were paid to roughly 67 million households

2. 12.2 million jobs have been generated from social security

3.  $804.6 billion in labor income

4. Generated a total of $2.6 trillion in economic output and $1.6 trillion in GDP.

5. Generated $363 billion in federal, state, and local tax revenues.

6. Each $1 in Social Security benefits supports $2 in total economic activity.

It goes without saying that the impact of social security is substantial. The reason this research was conducted is fear of benefit cuts. Dan Doonan, the NIRS director elaborated on this.

“Every dollar paid out in Social Security benefits supports two dollars in total economic activity. These benefits not only provide financial security for millions of Americans, but they also sustain jobs, generate tax revenue, and keep local economies strong… As policymakers debate how to ensure the long-term solvency of Social Security, they should remember that benefit cuts wouldn't just harm retirees: they would ripple through every community in America,"

Social Security is more than just a benefit to retired people, it is a portion of the economy that stimulates and even encourages economic growth and activity. This sort of responsibility that Social Security is important to preserve, as drastic changes in funding would be detrimental to this and ultimately slow down the economy.

Source: https://www.prnewswire.com/news-releases/social-security-benefits-support-12-million-us-jobs-and-generate-2-6-trillion-in-economic-output-according-to-new-national-institute-on-retirement-security-report-302599200.html

Over 1600 flight delays as government shutdown continues

 

Nearly a month since the government shutdown, we're starting to see the effects on government operations, and those who benefit from various government programs and funding are becoming less operational. Southwest airlines reported Sunday that the airline experienced on Sunday, October 26, over 1600 flight delays. 

Airlines as a whole have experienced over 8000 flight delays. This shutdown is the second-longest shutdown and could continue to get worse with no progress being made on a government funding bill passing through Congress without concessions to Democrats to extend subsidies that helped millions afford health insurance. 

Source: https://www.reuters.com/business/more-than-1400-flights-delayed-government-shutdown-hits-day-27-2025-10-27/

U.S. Inflation Cools Slightly, but Shutdown Clouds the Economic Picture

U.S. consumer prices rose less than expected in September, suggesting that inflation pressures are easing. The Consumer Price Index increased only 0.2%, while core inflation held steady at 3.1% year over year. This slowdown could give the Federal Reserve room to begin lowering interest rates, providing some relief to borrowers and stabilizing markets strained by high costs.

However, the ongoing government shutdown is creating uncertainty by disrupting key data collection. Without full access to reports from agencies such as the Bureau of Labor Statistics, policymakers may struggle to gauge the actual state of the economy. This leaves the Fed in a difficult position, balancing progress on inflation with the risks of acting without complete information.

Article: US consumer inflation cools in September; government shutdown threatens next report By Lucia Mutikani

Link: https://www.reuters.com/world/us/us-consumer-prices-rise-slightly-less-than-expected-september-2025-10-24/