Paul Krugman: “The surge in AI investment — a tech boom the likes of which we haven’t seen since the 1990s — has buoyed the economy in the short run, offsetting the drag from Trump’s tariffs. Without the data center boom, we’d probably be in a recession. But hundreds of billions in spending on data centers have boosted investment, while soaring stock prices have supported consumer spending by the wealthy even as demand from lower and middle-income Americans weakens.”

“However, unlike the tech boom of the 1990s, the current AI boom isn’t translating into widespread economic optimism. In fact, Americans are remarkably downbeat about the economy and the future in general. And I think it’s worth trying to understand why.”

“Carlyle Group, the investment manager whose portfolio companies employ more than 700,000 people globally, is stepping into the economic data void left by the US government shutdown with a grim read on the labor market,” Bloomberg reports.

“The US Labor Department’s September employment report, whose scheduled release on Oct. 3 was among those that have been postponed since the shutdown began last week, was expected by economists in a Bloomberg poll to show a 54,000 increase in nonfarm payrolls from August’s total of about 159 million. Carlyle estimates that just 17,000 jobs were created, among the weakest results since the US economy emerged from the 2020 recession.”

“The Trump administration is expected to announce a plan as soon as Tuesday to bail out U.S. farmers stung by trade disputes and big harvests, with the initial outlay potentially totaling up to $15 billion,” Reuters reports.

“The plan, however, could be difficult to roll out as an ongoing government shutdown prevents the kind of Congressional action needed to approve such a large payout, and existing government reserves fall short, the sources said.”