Weekly Economic Report 6.26.26

The consumer and corporate America appear on different tracks, with disposable income growing much less than recent spending – suggesting slower growth and lower prices ahead; while corporate revenues are screaming, as are new orders for capital goods – but shipments lag behind, due to supply bottlenecks, which are fueling massive price hikes. In essence, consumers have been able to tap assets by reducing their savings rate to pay for unexpected inflation in energy due to the Iran war. Meanwhile, businesses have also been active raising funds – but much more of their spending has fueled inflation. With the capital goods price hikes going straight to the bottom line, the AI boom has become self-reinforcing – at least in the short run. We expect a continuing boom in 2026 – but, in 2027, slower growth may come from exhaustion.

EU06-26-2026.pdf

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