The Week in Review: November 2, 2026
The American Economy Is Stronger Than It Appears
Sluggish job growth and weak consumer confidence might suggest an economy struggling to maintain momentum. Yet recent economic data tells a different story.
According to the Bureau of Economic Analysis, the U.S. economy expanded at a healthy 3.4% annualized rate in the third quarter, reflecting continued strength despite concerns about inflation, employment, and the economic outlook.
What Is Driving Economic Growth?
Two factors stand out: consumer spending and business investment.
American consumers continue to spend despite higher gasoline prices and persistent concerns about the cost of living. So far, rising prices at the pump have not significantly reduced spending in other areas of the economy.
At the same time, investment in artificial intelligence is providing a substantial boost to economic activity. Businesses are spending heavily on data centers, computing equipment, and related infrastructure to support the growing use of AI.
One measure of economic activity that reflects demand from businesses and households increased at a 4.9% annualized rate, its strongest pace since 2021.
Although the chart reflects investment across industries, AI-related spending has become an important contributor to that growth.
Keeping the Economic Picture in Perspective
Economic uncertainty has not disappeared, and it never will. Consumer sentiment, employment trends, and geopolitical developments will continue to influence the outlook.
But it is important to distinguish how people feel about the economy from what the economic data actually shows.
For now, the evidence points to an economy that continues to expand at a healthy pace, supported by consumer spending and substantial business investment.
Market summary
TWO FOR THE ROAD
An analysis from The Economist finds that in the vast majority of wealthy countries, millennials have higher inflation-adjusted incomes than previous generations did at the same age. - The Economist, October 18, 2026
According to the Tax Foundation, the top 1% of taxpayers earned 20.6% of adjusted gross income in 2023 but paid 38.4% of all federal individual income taxes. The top 5% earned 36.4% of income and paid 59.3% of taxes, while the top 25% earned 68.5% of income and paid 86.3% of federal individual income taxes.
By comparison, the bottom 50% of taxpayers paid just 3.3% of federal individual income taxes. – Tax Foundation, April 15, 2026
I hope you have a great week!
Warmest Regards,
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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