U.S. Economy and its Mess

[rareboy]

 

[rareboy]

 

[rareboy]

What am I missing? The concept baffles me.

AI may be able to do more of your shopping, but it can't do any of your consumption.

70% of our economy is driven by consumer demand.

I'm not sure how an economy in which AI eliminates tens of millions of jobs is supposed to work.

All the Ai trillionaires and Ai addicted corporations are going to be watching their consumer base shrink to nothing as the middle class vanishes entirely and comsumption collapses.

This might be a great thing for the environment and there is no question that the Thiels and Musks and a few others are openly promoting the notion of a depopulated planet.

But long the way, without jobs and salaries, Amazon won't be shipping goods, Teslas won't be selling and there will likely be a huge drop-off in subscribers for infotainment.

So again. Watching the economy slide into a classic retraction and recession, what am I missing?

 

[KaraBulut]

...This might be a great thing for the environment and there is no question that the Thiels and Musks and a few others are openly promoting the notion of a depopulated planet.

But long the way, without jobs and salaries, Amazon won't be shipping goods, Teslas won't be selling and there will likely be a huge drop-off in subscribers for infotainment.

So again. Watching the economy slide into a classic retraction and recession, what am I missing?

Amazon does pick up some profits from volume sales but a big chunk of their revenue comes from "the cloud" - Amazon Web Services aka AWS. A surprising number of companies host their data systems in Amazon's data centers. If they don't host, they have their back-up/failover system on AWS.

One of the reasons that you saw all these tech billionaires lined up to pay tribute and write checks to Trump is that the FTC under Biden was looking at these companies in anti-trust actions. Any time a competitor appears on the horizon, these companies buy out their competitor and shut them down to maintain their monopoly. Because of the pay-to-play Trump Administration in the White House, you can anticipate that all of the FTC actions that Trump has been holding over the tech companies' heads will disappear as they continue to finance ballrooms and invest in the Trump Organization.

There's an interesting factoid that came out recently: in the past, the tech monopolies have been able to buy up their competition because they had enormous amounts of cash in the bank and little debt. Because of the AI "boom" and the massive infrastructure being built for AI, these companies have issued debt. They are going in hock to buy up land, build data centers, deploy satellites, build driverless vehicles, add power stations, add water processing plants and offer free AI services in order to have users get used to the idea of using AI for everything.

It's a bubble and eventually, there will be a correction. The companies are gambling on the market addiction to AI becoming established before the crash comes.

 

[Alistair]

 

[rareboy]

Device Hoarding.

Next it will be 'Car Hoarding' ' Clothes Hoarding' Cash Hoarding etc. if and as consumers check out on checkcing out and decide to use stuff until it wears out
or consumer confidence returns.

 

[rareboy]

This is going to be driven by huge amounts of household income being poured into insurance companies and other financial based dservices that actually provide no added value or product.

This isn't the kind of pocket book expense that means cutting back on little luxuries like avacadoes or Starbucks.

This is the kind of redirection of consumer cash that will likely mean recession in retail, housing, and food related services.

 

[KaraBulut]

And so, it begins... in time for the holidays.

Amazon cuts 14,000 corporate jobs as spending on artificial intelligence accelerates

Amazon will cut about 14,000 corporate jobs as the online retail giant ramps up spending on artificial intelligence.

apnews.com

Follow-up: the layoffs were detailed in Amazon's latest filings:

Amazon cut more than 1,800 engineers in record layoffs, despite saying it needs to innovate faster

• Amazon’s mass layoffs announced last month hit engineers the hardest, according to state filings.
• Nearly 40% of the roughly 4,700 positions eliminated across Washington, New York, New Jersey and California were engineering jobs.
• Video games, advertising and AI search were also significantly impacted.

Amazon’s 14,000-plus layoffs announced last month touched almost every piece of the company’s sprawling business, from cloud computing and devices to advertising, retail and grocery stores. But one job category bore the brunt of cuts more than others: engineers.

Documents filed in New York, California, New Jersey and Amazon’s home state of Washington showed that nearly 40% of the more than 4,700 job cuts in those states were engineering roles. The data was reported by Amazon in Worker Adjustment and Retraining Notification, or WARN, filings to state agencies.

It wasn't clerical staff and low-wage warehouse jobs. They laid off a bunch of white collar workers who were engineers and programmers. The beginning of the AI great replacement.

 

[rareboy]

Black Friday...not good news. And not a good harbinger for the rest of the season.

The Trump regime was quick to point to record sales for Black Friday. Problem is, it's not really because people were buying more things. It's because inflation bumped up the amount of money spent.

Black Friday Spending Raises Eyebrows Over US Economy (Newsweek; December 1, 2025)

"Salesforce data, cited by Forbes, found that order volume fell by about 1 percent year over year, while average selling prices were up 7 percent—indicating that much of the growth was caused by inflation rather than any uptick in shopping enthusiasm."

 

[KaraBulut]

This is the time of year when retailers and shipping companies hire seasonal staff to help with the holidays.

This year, Amazon is announcing layoffs. Retailers didn't see sales increase in terms of units sold or shipped (only an increase in prices of merchandise sold).

The DoL didn't produce economic numbers, blaming the government shutdown. But private payroll company ADP did produce numbers.

ADP reported that small businesses are cutting staff. Bigger companies are hiring as expected.

https://www.cnbc.com/2025/12/03/adp-jobs-report-november-2025-private-payrolls-unexpectedly-fell-by-32000-.html

November private payrolls unexpectedly fell by 32,000, led by steep small business job cuts, ADP reports

• The U.S. labor market slowdown intensified in November as private companies cut 32,000 workers, with small businesses hit the hardest, payrolls processing firm ADP reported Wednesday.
• Larger businesses, entailing companies with 50 or more employees, actually reported a net gain of 90,000 workers. However, establishments with fewer than 50 saw a decline of 120,000.
• The ADP report is the last monthly jobs picture the Federal Reserve gets before it meets Dec. 9-10.

 

[rareboy]

I wonder at which point the connection is made that consumers with less money will buy less.

Wait for the large retialers to also cut back if the in store sales aren't strong before Christmas or tough it out for the Boxing Day/January sales....

 

[KaraBulut]

I wonder at which point the connection is made that consumers with less money will buy less.

Wait for the large retialers to also cut back if the in store sales aren't strong before Christmas or tough it out for the Boxing Day/January sales....

I haven't seen the online numbers yet but I did talk with a young guy at the gym who works at one of the big box retailers. They were mandated to work Thanksgiving and Black Friday. He said that traffic was about the same as a regular workday with maybe a few more patrons coming in to pick up online orders. Usually, the stores are very busy on Thursday evening and all day Friday.

 

[rareboy]

I just know that in Ontario, the mood has shifted because of Trump potentially destroying the North American economy this year.

Consumer sentiment is really dampened as we wait for the recession that the billionaires are constructing to lower the price of the last of the things they want to buy up.

 

[cityboy-stl]

I just know that in Ontario, the mood has shifted because of Trump potentially destroying the North American economy this year.

Consumer sentiment is really dampened as we wait for the recession that the billionaires are constructing to lower the price of the last of the things they want to buy up.

And just wait. The Maga Monsters will find a way to blame it all on Joe Biden.

 

[Kulindahr]

 

[Kulindahr]

 

[Kulindahr]

 

[rareboy]

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[rareboy]

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[rareboy]

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