The boom in artificial intelligence is the only thing holding the US economy together – Trump is attacking its greatest weakness.
Nov 3, 2025, 4:37 amNov 3, 2025, 4:37 am
Niklaus Vontobel / ch media
The USA is currently putting on a strange spectacle. The labor market is on the verge of a crisis. Inflation is about to make a comeback. The stock market at the beginning or end of a historic boom. In the middle of it all, Donald Trump is raging. The world is watching and wondering whether the next crisis made in the USA will soon hit it.
He just doesn’t like them: US President Donald Trump wants to destroy wind turbines even where there are none.Image: AI generated/Shutterstock
America’s job market is frozen. There are only a few New hirescompanies are creating just as few jobs as in the financial crisis of 2008. At the same time, there are few layoffs. The company bosses don’t know what tomorrow will bring. Higher Customs dutieslower tariffs? Or does Trump threaten them like a mafioso? Apple boss Tim Cook has Trump on it remembered: “Tim, I treated you very well.”
And there are much fewer Terminations. Employees know that anyone who becomes unemployed this fall will remain unemployed for a long time. So they cling to their jobs and a term is making the rounds: “job hugging”. According to one, it works Business consulting about holding on to your job as if it were about your “own life”.
The job market is frozen – but every time there are major job cuts like at UPS or Amazon, everyone looks around with fear. Is the labor market plunging into a crisis? The head of the central bank, Jerome Powell, has therefore cut key interest rates twice. But Powell also emphasized whether he would lower them further was completely open. Because he has another problem: inflation is returning.
Inflation was 2.9 percent in September. This means that prices are rising again – and faster than under Trump’s predecessor Joe Biden. Trump had promisedhe would lower the prices of eggs, apples and salad on the first day of his term in office. Well complains even his party colleague Marjorie Taylor Greene:
“Americans are being decimated by the high cost of living.”
Trump’s popularity deeper than ever in his first term
Consumers like rising prices about as much as stomach ulcers. According to the University of Michigan survey, theirs is Mood much worse than before Corona, and even as bad as during the pandemic. Trump’s popularity is, according to the «Economist» deeper than it ever was in his first term in office – and nowhere deeper than on the most important issue: prices and inflation.
Things are likely to get worse for consumers, but not quite as bad as feared.
Trump has imposed tariffs averaging 18 percent. The company bosses have not yet passed on these tariffs to customers in full: only 20 percent of them, according to one study with data from five large retail lists. Many bosses probably still had goods in stock. Hoping for better customs times. Or feared, like Walmart, being publicly attacked by Trump if they raise prices. Tump had demanded of the retailer: “Swallow the tariffs yourself!”
However, many bosses may have avoided the tariffs, writes the “Financial Times”. Trump’s tariffs are Kafkaesque. For every product there needs to be a place of origin and a product code. For all components. For your suppliers. For their suppliers. A madness. But with a system: one that allows “tariff design”. According to one Advisor These are “subtleties that are exploited”, “minor changes to the product, shipping method or composition”. In this way, “classifications with lower tariffs could be found”.
Despite “tariff design,” next year the bosses will do more of what they did in Trump’s first term: tariffs pass along. The renowned Peterson Institute says for 2026: “Inflation is coming” at a rate of over 4 percent. In particular, important products would become more expensive, such as meat, coffee, vegetables and toys.
Problems facing many Americans are being obscured
However, there will be no recession. According to the Peterson Institute, gross domestic product (GDP) is rising more slowly, but continues to rise. It is questionable whether this increase really reflects an increasing prosperity of the population as a whole. Like the New York Times writes:
“Data that is supposed to capture the entire population could obscure the problems facing a large portion of Americans.”
Everything is being covered up by the boom in artificial intelligence (AI), which is sweeping the US economy with it. According to the Swiss Bank J. Safra Sarasin Investments in AI and related technologies increased by around 30 percent in the first half of the year. This means that the AI boom contributed three quarters to overall GDP growth.
The AI boom is also driving the stock market from record to record. According to Sarasin, the boom has lifted global stock markets more in six months than has ever happened twice before in 30 years: in the stock market comebacks after the financial crisis of 2008 and after the Corona crash of 2020.
And via the stock market, AI also supports consumption – but almost only that of the rich. Stocks are unequal distributed in the USAalmost 90 percent owned by the richest 10 percent. Loud Moody’s Analytics They spent so much money over the summer of 2025 that a full 49.2 percent of total consumption came from them. The New York Times wrote:
“America has never been richer, but for a large portion of the population it doesn’t feel that way.”
Growth, stock market, consumption: The US world is held together by the AI boom, even if Trump is raging in the middle of it. The question is, how long can the AI boom develop such power? Analysts questions the big tech companies: “Are we in a stock market bubble?”
Even if it is actually a bubble, it can still grow much larger. Bubbles are driven by psychology. The fear of missing out on a chance at wealth while your neighbor moves into a villa. That’s why prices can continue to rise long after they have left reason behind. And that’s why traders study even today the chilling example of Isaac Newton from the 18th century.
Newton had early on in that time South Sea Bubble invested, sold and mocked: “I can calculate the movement of celestial bodies, but not the madness of people.” But the prices went higher, higher and higher. He became weak. Crash. Newton lost a fortune and never wanted to hear about the South Seas again.
However, the AI boom could end differently. The data centers devour enormous amounts of energy and thus massively increase the overall US electricity demand Raiffeisenbank writes. In the state of Virginia they even account for 40 percent of demand. Overall, according to Raiffeisen, the supply cannot keep up. In electricity trading, the… Prices for future deliveries “continuously increased”.
Electricity is the weak point of American AI. Nobel Prize winner Paul Krugman warns:
“The shortage could bring the boom in AI spending to an abrupt halt.”
US economist Dean Baker says at the think tank CeprChina has an advantage here. Its AI programs would do a similar job, but would use many times less power. In addition, electricity is cheap and plentiful.
“Access to electricity will not be an obstacle in China.”
There is only one reason for China’s lead: the country is massively promoting renewable energies and has thus pushed down the prices of solar cells and wind turbines globally. Trump, on the other hand, complains:
“Stupid and ugly wind turbines are ruining New Jersey.”
They are to blame for the rising energy prices there. “Stop the wind turbines!” Only: New Jersey doesn’t have a single wind turbine.
Trump has announced that he will not issue permits for solar or wind power plants. In fact, he has already stopped some major projects. It is obvious that he is harming the USA. In 2025, solar, wind and batteries contributed the majority of new electricity capacity. But perhaps it is, as Krugman writes:
“Trump’s energy policy is shaped by petty prejudices. He is angry about the wind turbines which he says are ruining the views from his Scottish golf course.”
(aargauerzeitung.ch)