Bloomberg Surveillance · Tuesday, August 4, 2026
The US labor market is currently exhibiting normal dynamics, with strong payroll growth and a stable unemployment rate. However, underlying inflation remains slightly above 2.5%, partly due to tariffs and the increasing impact of AI. While the consumer is performing reasonably well, sustained AI-driven capex growth is not seen as sustainable long-term.
“I think we are at least well, at least from a labor market perspective that I think is very fair to say the lad market seems normal.”
“I think the trend, the actual underlying trend and inflation is a little north of two and a half percent. Now, there's been other things that have held up inflation to make it abnormally high. Tariffs have been one thing we estimate that's been boosting inflation by about sixty to seventy basis points. That is going to roll off the data as you move through time and companies don't again raise prices from tariffs. The one piece of the inflation puzzle that is elevated that we do have to keep a very close eye on is the impact from AI. Okay, so that's about adding about thirty basis points.”
“Yeah, I mean, I think we're in an environment where consumption is trending at a little above two percent. I think it'd be better if we just kind of stabilize around two percent and the investment side of the backdrop is normally high shriven by AI.”