(The Center Square) – The economy is not falling apart. But important parts of it are barely moving.
The major exception is investment. Business spending on equipment and intellectual property remains strong, with the AI buildout clearly part of that story. And private domestic demand more broadly has not stalled: real final sales to private domestic purchasers rose at a healthy 3.9% annualized rate in the second quarter.
So the weakness isn’t everywhere. It is showing up most clearly in hiring, labor-force growth and household purchasing power. At the same time, households have been saving less: the personal saving rate fell from 4.5% in January to 2.7% in June. That can support spending today, but it leaves less cushion if income growth weakens.
That…
