Kenneth Kim, Senior Economist at KPMG LLP, delivered the morning's keynote on the US economic outlook. Twenty-nine early- and pre-venture companies followed with one-minute Lightning Pitches. Highlights below.
Macro backdrop
US real GDP is growing at approximately 2%. Equity markets are near record highs. Three headwinds are in view: Middle East tensions, elevated energy prices, and above-target inflation. WTI crude moved from roughly $65 per barrel to a near-$90 peak before settling below $80.
Inflation and rates
CPI and PCE both printed around 3.5–3.7% year-over-year in June. A further increase is expected in the July release. Since 2020, motor vehicle insurance is up 49%, eating out is up 40%, and overall CPI is up 28%.
Consumer and equities
US consumer spending is concentrated. The top 10% of earners account for roughly 50% of personal outlays. High-income spending is up more than 70% since Q4 2019; the bottom 80% is tracking in line with inflation. The University of Michigan consumer sentiment index is at a record low. The Nasdaq, up 17% year-to-date at its recent peak, has given back most of those gains, driven by energy tensions and China's release of lower-cost competitive AI models.
AI and capital investment
Data center construction spending has quadrupled since Q4 2022, from approximately $15B to nearly $60B. AI-linked technology spending is approximately 33% of total US business investment, near a record. On a risk-adjusted basis, generative AI adoption is outpacing prior technology cycles — PC, internet, cloud — over their equivalent years since introduction.
Demographics and labor supply
The CBO projects US deaths will exceed births by 2030, a decade earlier than its January 2024 estimate. Net international migration is approximately 300K this year, down from a recent peak of 2.7M. Downstream effects are already visible in elder care and assisted living staffing, skilled-trade absorption into data-center construction, and plumber availability. Healthcare employment is approximately 18.5M and rising; information-services employment is declining. US life expectancy has reached a new high of 79 years.
