Today’s political consensus crosses all ages, demographics and party lines: 3 out of 4 Americans think the economy is in a slump. It is not just in their heads. Economic growth this year has been practically stagnant, save for one exception, economists say.

Billions of dollars invested by California-based tech giants in artificial intelligence infrastructure accounted for 92% of the nation’s GDP growth this year.

But, so far, little evidence exists that their ventures are expanding opportunities for everyday Americans.

“You have to watch out for AI investments — they may continue to carry the economy or they may slow down or crash, bringing the rest of the economy together with them."

Even in California itself, where 4 of the top 5 AI companies are, the AI boom has yet to translate into tangible pocketbook benefits. Consumer confidence in the state has reached a five-year low. And AI fueled a wave of cuts, cited in 48,000 job losses nationwide this year.

“It is evident that the U.S. economy would have been almost stagnant, absent the capital expenditures by the AI industry,”

The top 10 stocks listed in the Standard & Poor’s 500 index far outperforming the rest of the market. And the few who benefited from dividends fueled much of the rest of this year’s economic growth, with the vast majority of U.S. consumption spending attributed to the richest 10% to 20% of American households.

“There were ripple effects into high-end travel, luxury spending, high-end real estate and other sectors of the economy driven by the financial elite."

“Obviously, that’s not a recipe for sustainable growth,” he said.

https://www.latimes.com/politics/newsletter/2025-12-18/u-s-economy-was-stagnant-in-2025-with-one-exception