Two significant economic indicators reveal deepening consumer distress in the U.S. The University of Michigan’s Consumer Sentiment Index dropped to 48.2, marking the lowest level in its 74-year history, worse than readings during the Great Financial Crisis. Concurrently, the New York Fed reported a household debt delinquency rate of 4.8% in Q4 2025, the highest since 2017, especially affecting lower-income borrowers. In the subprime auto market, over 6% of loans are at least 60 days overdue, a record high since 1993.
Contrasting this consumer downturn, AI semiconductor firm Cerebras Systems went public with a valuation of $100 billion, experiencing 20 times oversubscription. Meanwhile, projected cumulative AI capital expenditure is expected to reach $5 trillion over five years, surpassing the GDP of the United Kingdom. As Wall Street largely decouples from the struggling Lower-K consumer segment, political and regulatory backlash against rising utility costs and AI’s impact on jobs is gaining momentum, indicating potential instability in the booming AI sector ahead of the 2028 elections.
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