Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, May 1, 2026

AI Summary. The share of the US population receiving food stamps doubled from 6% to 12% over roughly 25 years, with real costs per capita rising 179% to $279 a year, though both remain below their post-Great-Recession peak. Households with an elderly person now outnumber those with a child, reversing the early-2000s pattern.

Angela Rachidi American Enterprise Institute
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About 40mm Americans, 12% of the population, receive SNAP benefits, up from 6% in 2000. In 2023, only 34% of these households included children, down from 49% in 2010, while 36% contained an elderly person, up from 16% in FY2010.

How have food stamp enrollment, costs, and recipient households changed?

Core argument: The share of the U.S. population receiving SNAP doubled from 6% in FY2000 to 12% in FY2025, while real SNAP costs per capita rose 179%, from roughly $100 to $279 per year in 2024 dollars.

Comparing FY2000 with FY2025, the share of the population receiving SNAP doubled from 6% to 12%, while real SNAP costs per capita increased by 179%—from roughly $100 per year to $279 (in 2024 dollars). Despite this growth, per capita participation and costs in FY2025 remained below their pre-pandemic peak in 2013, which coincided with the aftermath of the Great Recession and changes in eligibility and other policies stemming from the 2008 Farm Bill. SNAP is countercyclical, meaning that all else equal, the number of people receiving SNAP should rise during recessions because of increased unemployment and decline as the economy recovers, [though] overall SNAP participation has grown faster than changes in the unemployment rate alone would predict. Over the long run, and especially since FY2020 (due to the Thrifty Food Plan’s increase in the maximum SNAP benefit), costs per capita have not returned to prerecession levels after a period of high unemployment. In FY2023, the share of SNAP households containing an elderly person (36%) exceeded the share containing a child (34%) for the first time. This was a sharp departure from the early 2000s, when more than half of SNAP households contained a child and less than 20% included an elderly person (Figure 2).

Takeaways by Macro Roundup® AI

  1. The share of the U.S. population receiving SNAP doubled from 6% in FY2000 to 12% in FY2025, while real SNAP costs per capita rose 179%, from roughly $100 to $279 per year in 2024 dollars.
  2. In FY2023, the share of SNAP households containing an elderly person reached 36%, exceeding the 34% containing a child for the first time, against the early 2000s when over half contained a child and under 20% included an elderly person.

Related Articles:

  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
  • Poverty and Dependency in the United States, 1939–2023 — Extending a consistent poverty measure back to 1939, the authors estimate US absolute poverty fell from 48.5% to 19.5% between 1939 and 1963, driven by growth in market income rather than government transfers net of taxes. Poverty fell no faster in the 24 years after the War on Poverty than before.
  • Government Benefit Programs Already Do A Lot To Help Low Income Families — For a two-adult, three-child family, existing taxes and government benefits bring take-home resources to about $58,000 with no earnings, $79,000 with $20,000 of earnings, and $90,000 with $80,000 of earnings plus $15,000 in employer health premiums. A $75,000 gap in earnings and work-related benefits narrows to $11,000 in take-home pay.

AI Summary. Sectors with the highest artificial intelligence adoption rates have also seen the strongest growth in new business applications, which one analysis interprets as evidence that AI is lowering the barriers to starting a company.

Torsten Sløk Apollo
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Since 2022, sectors with the highest AI adoption rates have also seen the strongest growth in new business applications, suggesting to Torsten Sløk that “AI is lowering the barriers to starting a company.”

Is AI lowering the barriers to starting a company?

Core argument: Sectors with the highest AI adoption rates have recorded the strongest growth in new business applications since 2022.

Sectors with the highest AI adoption rates have also seen the strongest growth in new business applications since 2022, showing that AI is lowering the barriers to starting a company.

Takeaways by Macro Roundup® AI

  1. Sectors with the highest AI adoption rates have recorded the strongest growth in new business applications since 2022.
  2. Torsten Sløk reads the link between AI adoption and new business applications as a sign that AI is lowering the barriers to starting a company.

Related Articles:

  • Generative AI and Entrepreneurship — The authors find that startups with a larger share of tasks doable by generative AI cut employment beginning immediately after ChatGPT's release, with technically proficient founders restructuring teams toward higher-skill roles. Venture investors made smaller but more numerous deals, and new firm entry offset the decline in total startup employment.
  • Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent — The annual compensation gap between top industry and academic artificial intelligence researchers widened from roughly $294,000 to $1.5m, coinciding with accelerating academic out-migration toward large incumbent technology firms. Researchers who move to industry cut paper production by about 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary innovation.
  • Which Entrepreneurs Boost Productivity? — The authors find that a minority of entrepreneurs are "transformative" — generating disproportionate productivity gains, scoring high on IQ tests, being well-educated, and hiring research and development workers. They argue that economies with more such entrepreneurs and R&D workers sustain higher long-run productivity growth.

AI Summary. The author estimates China's State Administration of Foreign Exchange holds roughly $1.8tn in dollar assets, about 55% of $3.3tn in reserves, while state commercial banks, policy banks, and the China Investment Corporation hold dollar assets outside that balance sheet. Summing these suggests China could hold more dollars off the reserve manager's books than on them.

Brad Setser Council On Foreign Relations
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Setser estimates that external dollar assets of state commercial and policy banks and CIC’s dollar assets are ~ on par with the ~$1.8T held by SAFE, and concludes that China has not reduced its dollar exposure and likely has ~$4T of dollar assets.

Does China hold more dollar assets outside its official reserves than inside?

Core argument: Roughly 55% of China's $3.3 trillion in reserves, about $1.8 trillion, is a reasonable estimate of SAFE's dollar holdings, which include a sizable share of U.S. equities rather than fixed income alone.

55% of China’s $3.3 trillion in reserves is roughly $1.8 trillion. That is a reasonable estimate of SAFE’s dollar holdings (which include a decent chunk of U.S. equities; it isn’t all in fixed income). SAFE’s quarterly data shows state commercial banks had $1 trillion in dollar assets (versus $300 billion in dollar liabilities abroad) at the end of Q4, and probably more like $1.1 trillion in dollar assets now. The policy banks have an undisclosed foreign portfolio. But AIDdata estimated that they could hold close to $1 trillion in claims on the world—and most of those seem to be in dollars. And, of course, the bulk of the China Investment Corporation’s (CIC) private equity investments will be dollar-based. That suggests that the bulk of the CIC’s $450 billion in foreign assets are dollars. Sum it up, and China, Inc. could hold more dollars off SAFE’s balance sheet than on SAFE’s balance sheet.

Takeaways by Macro Roundup® AI

  1. Roughly 55% of China's $3.3 trillion in reserves, about $1.8 trillion, is a reasonable estimate of SAFE's dollar holdings, which include a sizable share of U.S. equities rather than fixed income alone.
  2. SAFE's quarterly data show China's state commercial banks held $1 trillion in dollar assets against $300 billion in dollar liabilities abroad at the end of the fourth quarter, with dollar assets probably closer to $1.1 trillion since.
  3. AidData estimated China's policy banks could hold close to $1 trillion in claims on the world, most of them apparently in dollars, and with the bulk of the China Investment Corporation's $450 billion in foreign assets dollar-based, China Inc. could hold more dollars off SAFE's balance sheet than on it.

Related Articles:

  • China Is Not Dumping US Treasuries — China's state-owned financial institutions added $100bn in foreign assets in one month and $70bn the next, absorbing dollars from the country's trade surplus as exporters sought to sell dollars for renminbi. The author argues dollar accumulation has shifted from China's foreign exchange agency to state banks, which either buy Treasuries or lend to investors who do.
  • Don’t Blame America’s Current Account Deficit On the Dollar — Foreign official purchases of dollars are too small to mirror the US current account deficit, and net official financial inflows have fluctuated around zero even as the deficit widened; the euro area runs a current account surplus despite the euro's reserve role. The author argues materially reducing the US fiscal deficit is the key policy prerequisite for global rebalancing.
  • The U.S. Trade Deficit: Myths and Realities — Taxing capital inflows would weaken the dollar but could raise domestic interest rates and depress investment, harming long-term growth, while an interest rate cut absent recession would be inflationary and erode any real depreciation needed to durably improve the trade balance. Fiscal restraint could weaken the dollar and reduce the trade deficit.

AI Summary. Foreign capital flowing into the US is shifting from government purchases of US Treasury bonds toward private foreign investment in US stocks and other riskier assets. This means a share of future gains from US productivity-enhancing investment will flow to these foreign investors, who are likely more willing to sell and exit if returns worsen.

Timothy Taylor Conversable Economist
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Taylor warns that as foreign investment in US assets shifts from government Treasury purchases to nongovernment purchases of US equities, “future gains from US productivity-enhancing investment will be flowing to foreign[ers].”

How is the shift toward foreign private investment changing US borrowing?

Core argument: The historical US pattern of borrowing cheaply through foreign government and central bank purchases of Treasury bonds while US investors bought higher-return, riskier assets abroad is shifting.

As one looks more closely at [the US trade deficit] there are some yellow flags waving. For example, it used to be that the US economy could pay low interest rates when borrowing (for example, when governments or central banks in other countries purchased US Treasury bonds), and then US investors putting money abroad would instead tend to buy higher-return and riskier investments. From an overall macro point of view, the US economy was borrowing cheap and investing for a higher return. But this pattern is shifting. Instead of foreign governments buying US Treasury bonds, it’s becoming more common for non-government foreign investors to put money into the US stock market and other investments. As a result, a share of the future gains from US productivity-enhancing investment will be flowing to these foreign investors. Also, these non-government foreign investors are likely to be more willing to sell and flee if returns on these riskier US investments take a turn for the worse. Thus, the accumulated effect of these annual imbalances raises some cause for concern.

Takeaways by Macro Roundup® AI

  1. The historical US pattern of borrowing cheaply through foreign government and central bank purchases of Treasury bonds while US investors bought higher-return, riskier assets abroad is shifting.
  2. Non-government foreign investors are increasingly putting money into the US stock market and other investments, so a share of future gains from US productivity-enhancing investment will flow to those foreign investors.
  3. Non-government foreign investors holding riskier US assets are likely to be more willing to sell and flee if returns worsen, and the accumulated effect of these annual imbalances raises some cause for concern.

Related Articles:

  • Understanding Global Imbalances — The US, China, Germany, and Japan account for roughly two-thirds of global current account imbalances, with the US deficit at 4% of GDP financed by capital inflows into dollar assets. The average duration of a surplus or deficit spell roughly doubled since the 1980s, building large net foreign asset and liability positions.
  • The Dangerous Triumph Of Neo-Mercantilism — Neo-mercantilism is thriving in both China, which pairs infant-industry promotion with large trade surpluses, and in a United States focused on external deficits and protecting domestic markets. The author argues this will likely fracture the world economy, and that a new multilateral treaty could include a mechanism to combat large structural trade surpluses.
  • Debt, Deficits & Global Imbalances — Taxes or restrictions on short-term capital inflows were argued to be a more direct and potentially superior tool than tariffs for shrinking the trade deficit, since tariffs risk retaliation and supply-chain distortions. Proponents said such measures could reduce reliance on household and government borrowing to sustain employment, if paired with efforts to strengthen domestic demand and tradables capacity.

AI Summary. Advances in rockets, telescopes, satellites, artificial intelligence and robotics, alongside rising public and private space funding in the US and China, are expanding scientists' ability to probe space, with both countries planning crewed Moon landings. PwC projects cumulative lunar economy revenues of $94bn–$127bn over the 25 years to 2050.

Michael Peel and Clive Cookson Financial Times
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PwC forecasts that commercial space projects could generate between $94B and $127B over the next 25 years. In real terms, NASA spending is ~ on par with its “Space Race” level of the 1960s and 1970s.

Are new technologies and rising funding expanding space exploration?

Core argument: PwC projects cumulative revenues of $94bn–$127bn from lunar economy activities such as mining and tourism over the 25 years to 2050.

Rapid technological advances in rockets, telescopes, satellites, AI and robotics mean scientists can probe outer space like never before. At the same time, public and private funding for space programmes has risen steadily, especially in the US and China, which both plan on landing people on the Moon by the end of the decade. Both powers have their sights on the potential gains from the so-called lunar economy. PwC, the consultancy, projects total cumulative revenues of between $94bn and $127bn from activities such as mining and tourism over the 25 years to 2050.

Takeaways by Macro Roundup® AI

  1. PwC projects cumulative revenues of $94bn–$127bn from lunar economy activities such as mining and tourism over the 25 years to 2050.
  2. The United States and China both plan to land people on the Moon by the end of the decade, with each targeting the potential gains from the lunar economy.
  3. Advances in rockets, telescopes, satellites, AI and robotics, alongside steadily rising public and private space funding in the US and China, allow scientists to probe outer space as never before.

Related Articles:

  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
  • Has Starlink Already Won the New Space Race? — Starlink has launched more than 8,417 satellites, 39% of all satellites launched since the first artificial satellite reached orbit, and its roughly 7,300 operational satellites make up almost two-thirds of all operational spacecraft. It delivers low-latency broadband to over 5mn customers in 125 countries and is projected to generate $12bn in revenue and $2bn in free cash flow this year.
  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.

Monday, May 4, 2026

AI Summary. 42 AI-related stocks have accounted for 75%-85% of S&P 500 returns, earnings and capital spending since generative AI chatbots launched, and 80%-100% over the more recent period. Unlike the dot-com era, rising tech capital spending has not been accompanied by increased debt financing in aggregate.

Michael Cembalest J.P. Morgan
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Since November of 2025, JPM’s 42 AI-related stocks drove 42% of S&P 500 returns, 193% of earnings growth, and 84% of capital spending. Tech P/E multiples have just experienced one of the largest corrections of the last decade.

How much of S&P 500 returns come from AI stocks?

Core argument: 42 AI-related stocks have accounted for 75%–85% of S&P returns, earnings and capital spending since GPT launched in fall 2022, rising to 80%–100% of those same variables when measured from fall 2024.

42 AI-related stocks have accounted for 75%-85% of S&P returns, earnings and capital spending since GPT was launched in the fall of 2022. If we push this date forward to the fall of 2024 to capture the more intense phase of AI investing and adoption, these 42 AI-related stocks have accounted for 80%-100% of the same variables. Tech P/E multiples have just experienced one of the largest corrections of the last decade. Another interesting vantage point: US tech stocks have the lowest ratio of P/E to earnings growth (the PEG ratio). This is mostly a reflection of low PEG ratios for semiconductor stocks given 62% expected earnings growth, compared to just 16% earnings growth expected for the software sector. In contrast to the dot-com era, the increase in tech sector capital spending has not been accompanied by increased debt financing in the aggregate.

Takeaways by Macro Roundup® AI

  1. 42 AI-related stocks have accounted for 75%–85% of S&P returns, earnings and capital spending since GPT launched in fall 2022, rising to 80%–100% of those same variables when measured from fall 2024.
  2. US tech stocks carry the lowest ratio of P/E to earnings growth, mostly reflecting low PEG ratios for semiconductor stocks with 62% expected earnings growth versus 16% expected for software.
  3. Unlike the dot-com era, the increase in tech sector capital spending has not been accompanied by increased debt financing in the aggregate, while tech P/E multiples have undergone one of the largest corrections of the last decade.

Related Articles:

  • Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities — Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
  • Smothering Heights — The four largest cloud computing firms are devoting rising shares of revenue to capital spending and research, with Meta's combined share reaching 70%. Unlike past investment booms, this one has been financed mostly from internal cash flow: 28 direct AI stocks make up 50% of S&P 500 market value but just 5% of its net debt.
  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.

AI Summary. Saudi Arabia has withdrawn large financial commitments including a $200m gift to New York's Metropolitan Opera and support for the LIV golf league, and no equally large sovereign capital pool—Japan, Norway, or Singapore—is positioned to replace Gulf funds. A pullback could push US artificial intelligence firms toward greater reliance on debt issuance.

Rebecca Patterson Council on Foreign Relations
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Patterson argues US bound capital from the Gulf may be peaking given demand for increased defense and infrastructure spending in the aftermath of the war, which at the margin, implies more debt financing of the AI buildout.

What happens to US AI funding if Gulf sovereign capital retreats?

Core argument: Saudi Arabia withdrew a $200 million gift to New York City's Metropolitan Opera in April and confirmed in late April that it would end financial support for the LIV golf league after this season.

In April, Saudi Arabia’s $200 million gift for New York City’s Metropolitan Opera was withdrawn. Meanwhile, the Saudis confirmed in late April that they would withdraw financial support for the LIV golf league after this year’s season. Critically, if this trend continues and gains momentum, there is no obvious, equally large capital source waiting in the wings. Unlike a decade ago when China and the Middle East effectively swapped places as the main sovereign funder for the United States, the next largest pools of sovereign capital today—like Japan, Norway, and Singapore—have different investment strategies or are not as large as the GCC’s SWFs in aggregate. Without a very large and willing new pool of capital to take its place (U.S. investment managers have been trying to increase fundraising from domestic retail investors), a pullback in GCC funds would hit at a bad time for American AI firms as they continue to speed up their race to grow. If these firms cannot get the capital they need from public or private markets or friendly foreign investors, then they may need to rely more on debt issuance, which started raising eyebrows last fall among the investment community.

Takeaways by Macro Roundup® AI

  1. Saudi Arabia withdrew a $200 million gift to New York City's Metropolitan Opera in April and confirmed in late April that it would end financial support for the LIV golf league after this season.
  2. No equally large replacement exists for Gulf Cooperation Council sovereign wealth funds, as the next largest sovereign pools—Japan, Norway, and Singapore—follow different investment strategies or are smaller than the GCC's funds in aggregate.
  3. A pullback in Gulf capital would hit American AI firms as they accelerate their growth race, potentially pushing them toward greater reliance on debt issuance, which raised eyebrows among investors last fall.

Related Articles:

  • Petrodollars. Myths and Reality — Saudi Arabia's balance of payments breakeven exceeds $90 a barrel on about 7m barrels a day of exports, so oil near $100 would not generate a large Saudi surplus. Each $10 rise in oil prices adds roughly $160bn to the import bills of Europe and South and East Asian importers.
  • Oil, War and the Global Economy: The Market’s Narrative in March 2026 — Sovereign credit ratings in the war-zone countries have not changed, but market-based measures of default risk have risen across much of the Middle East, with larger increases in Qatar, the United Arab Emirates and Turkey than in Saudi Arabia and Kuwait. The United States has also seen its default-risk spread surge, and global sovereign spreads rose about 12%.
  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.

AI Summary. Call center employment in the Philippines has reached nearly 2m workers and has grown every year since 2016, including through the artificial intelligence boom. As AI lowers the cost per customer interaction, companies are buying more of these services rather than fewer — an example of Jevons paradox.

Torsten Sløk Apollo
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The number of Filipinos working in call centers has risen every year since 2016 to ~2mm, despite the AI boom. Sløk argues this is “Jevons paradox in action: as AI makes call center work cheaper and faster, companies are buying more of it, not less.”

Does cheaper AI customer service increase call center employment?

Core argument: Nearly two million workers in the Philippines are employed in call centers, with employment rising every year since 2016 and continuing through the AI boom.

Nearly two million workers in the Philippines now work in call centers, up every year since 2016 and through the AI boom. This is Jevons paradox in action: as AI makes call center work cheaper and faster, companies are buying more of it, not less. Lower cost per interaction does not mean fewer interactions. It means more customers served, more channels opened and more markets worth reaching. The technology that was supposed to shrink the industry is fueling its expansion.

Takeaways by Macro Roundup® AI

  1. Nearly two million workers in the Philippines are employed in call centers, with employment rising every year since 2016 and continuing through the AI boom.
  2. The Philippine call center industry illustrates Jevons paradox, as AI makes each interaction cheaper and faster while companies buy more call center work rather than less.
  3. Lower cost per interaction means more customers served, more channels opened and more markets worth reaching, expanding rather than shrinking the call center industry.

Related Articles:

  • What The AI ‘Jobpocalypse’ Narrative Misses — Large gains in software productivity since the 1990s coincided with rising rather than falling web development employment, because demand for software grew faster than the labour needed per unit of output. Similar patterns appear in accounting, architecture, advertising, and high-tech healthcare specialisms such as lab testing and diagnostic imaging.
  • AI and the Fable of the ATMs — Bank tellers per branch fell steadily as automated teller machines spread, and total teller employment held up only because banking deregulation drove a rise in branch numbers; teller jobs are down nearly 40% from their peak. The author argues invoking this case for AI requires identifying an equivalent offsetting source of labor demand.
  • Generative AI and Entrepreneurship — The authors find that startups with a larger share of tasks doable by generative AI cut employment beginning immediately after ChatGPT's release, with technically proficient founders restructuring teams toward higher-skill roles. Venture investors made smaller but more numerous deals, and new firm entry offset the decline in total startup employment.

AI Summary. US power consumption has risen more in the past two years than in the previous 15 combined, yet supply has not kept pace and electricity prices have climbed more in four years than in the prior 14. The US Energy Information Administration projects generation to grow another 4.6%, with commercial users including data centers driving most added demand.

Joseph Politano Apricitas Economics
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American power consumption has increased more in the last two years than the previous 15 combined. Electrification has created ~300,000 jobs since 2019, including ~150,000 among electricians and electrical contractors.

Is US electricity supply growth falling behind surging demand?

Core argument: US power consumption has risen more in the last two years than over the previous 15 combined, yet electricity prices have also risen more over the last four years than in the prior 14.

America has entered another era of electrification—US power consumption has risen more in the last two years than over the previous 15 combined. Yet this hasn’t been nearly enough to meet demand, with electricity prices also rising more over the last 4 years than the prior 14. Projections from the US Energy Information Administration (EIA) expect generation to accelerate slightly over the next two years, growing another 4.6% in total, but that’s still not quick enough to close the gap or prevent further price appreciation. The return of sustained load growth after more than a decade and a half of stagnation represents a fundamental change in America’s energy markets, with the source of rising demand shifting alongside its scale. Indeed, the EIA expects more upcoming load growth to come from commercial entities—a category that includes data centers—than from industrial and residential uses combined. If those projections hold true, commercial power consumption will have grown more in the 4 years since ChatGPT’s launch than in the two decades prior.

Takeaways by Macro Roundup® AI

  1. US power consumption has risen more in the last two years than over the previous 15 combined, yet electricity prices have also risen more over the last four years than in the prior 14.
  2. The EIA projects US electricity generation will grow another 4.6% over the next two years, which it expects to be insufficient to close the gap with demand or prevent further price increases.
  3. The EIA expects more upcoming US load growth from commercial entities, a category that includes data centers, than from industrial and residential uses combined; if those projections hold, commercial consumption will have grown more in the four years since ChatGPT's launch than in the two decades prior.

Related Articles:

  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • U.S. Electricity Generation in 2025 Hit A Record, Again — U.S. electricity net generation reached a record 4.43 terawatt hours, up 2.8% from the prior year's high, contrasting with relatively flat generation from the mid-2000s to the early 2020s. Much of the recent demand growth comes from the commercial sector, which includes data centers, and the industrial sector.
  • Electric Fury — Rising US electricity costs are burdening consumers and stirring voter anger, with the rapid build-out of artificial intelligence data centers, tariffs, and upgrades to an aging grid pushing power prices higher at rates unseen in decades. Utility bills have moved to the center of US politics alongside grocery prices.

AI Summary. France is relatively well positioned to absorb higher energy prices because its economy is less manufacturing-oriented and its industry less energy-intensive than elsewhere in Europe, and its nuclear output has returned to normal after falling a third below capacity. Nuclear supplies close to 70% of French power, making electricity prices less sensitive to gas prices.

Alexandre Stott Goldman Sachs
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GS argues France’s economy is better positioned than most other European countries to cope with the increase in energy prices as nuclear power makes up ~70% of power production which “helps to sever the link between electricity and gas prices.”

Does nuclear power shield France from higher energy prices?

Core argument: Nuclear power accounts for close to 70% of France's electricity production, which makes French electricity prices much less sensitive to gas prices than in other European countries.

France’s economy is relatively well positioned to cope with the increase in energy prices. The first reason is that it is less manufacturing-oriented, and its industry is less energy-intensive than elsewhere in Europe (Exhibit 1, left). Second, nuclear power production is back to normal, after having fallen a third below capacity in 2022 following repairs and outages in 2022 (Exhibit 1, right). We recently showed that France’s large nuclear fleet (close to 70% of all power production) makes electricity prices much less sensitive to gas prices than in other European countries.

Takeaways by Macro Roundup® AI

  1. Nuclear power accounts for close to 70% of France's electricity production, which makes French electricity prices much less sensitive to gas prices than in other European countries.
  2. French nuclear output has returned to normal after falling a third below capacity in 2022 following repairs and outages.
  3. France's economy is relatively well positioned to cope with higher energy prices because it is less manufacturing-oriented and its industry is less energy-intensive than elsewhere in Europe.

Related Articles:

  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
  • This Time is Different (from 2022) — The Impact of Higher Energy Prices on European Manufacturing Industries — Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027, compared with an estimated 4% drag during the 2022/23 energy crisis. The current shock is primarily an oil supply shock affecting industry broadly and is more global, leaving European energy-intensive industries less exposed to competitiveness pressures.
  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.

AI Summary. Fielding a drone fleet able to compete with China requires the U.S. to break China's monopoly on batteries and motors and to cut the cost of other components, where weak domestic demand is a key obstacle. Chinese producers hold 80% of the U.S. commercial drone market, and experts warn building mass-production infrastructure could take a decade or more.

Josh Chin, Merrill Sherman, Jason French and Ievgeniia Sivorka Wall Street Journal
Date Posted:

The American drone industry is reliant on military demand whereas China owns ~80% of the American commercial drone market due to DJI’s cheap high performance drones.

What stands in the way of a competitive domestic drone industry?

Core argument: China holds 80% of the U.S. commercial drone market, according to Drone Industry Insights, with nearly all of that share attributable to DJI Technology's cheap, high-performance drones used by content producers, real-estate agents, factory inspectors, and police and fire departments.

To have a hope of fielding a sustainable drone fleet capable of competing with China, the U.S. needs to solve two problems. First, it needs to find a way to break China’s monopoly on batteries and motors. The Trump administration has injected billions of dollars into American companies that produce critical minerals that are needed to make motors and batteries, though the experts warn that building up the complex infrastructure needed for mass production could take a decade or more. It also needs to find ways to bring down the costs of the other parts as much as possible. Demand is a key issue here, industry insiders say. China owns 80% of the commercial drone market in the U.S., according to data from Drone Industry Insights. Nearly all of that dominance is thanks to Chinese giant DJI Technology, a maker of cheap but high-performance drones beloved by content producers, real-estate agents, factory inspectors and cash-strapped American police and fire departments.

Takeaways by Macro Roundup® AI

  1. China holds 80% of the U.S. commercial drone market, according to Drone Industry Insights, with nearly all of that share attributable to DJI Technology's cheap, high-performance drones used by content producers, real-estate agents, factory inspectors, and police and fire departments.
  2. Fielding a sustainable drone fleet able to compete with China requires the U.S. to break China's monopoly on batteries and motors and to cut the costs of other drone components.
  3. The Trump administration has put billions of dollars into American producers of the critical minerals needed for motors and batteries, though experts warn that building the infrastructure for mass production could take a decade or more.

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