Booming or Uneven? Two Ways to Read Today’s Economy

If you only looked at the headline numbers, the U.S. economy would seem to be in excellent shape. GDP is on pace to grow 2% this year. Unemployment sits at a low 4%. Corporate earnings from the second quarter grew roughly 30%, the strongest pace in decades. Consumer spending remains healthy, and the CEO of Visa recently described conditions as “strong and stable.”

By that read, the word that comes to mind is booming.

But ask people how they actually feel about the economy, and you get a very different answer. Surveys like the University of Michigan’s consumer sentiment index and the New York Fed’s expectations survey both show real unease. That’s why, in a recent client webinar, our Chief Strategy Officer Kurt Hoefer offered a second word: uneven.

Part of the gap between the data and the mood is political. Consumer sentiment tends to move sharply around politically charged events, and it’s often split along party lines. Sentiment dropped noticeably after “Liberation Day” in April 2025, recovered somewhat, then dropped again as the conflict with Iran unfolded. Much of that volatility reflects the news cycle more than economic fundamentals.

But not all of it. There’s a longer-term story in how wealth is distributed. Over time, the top 1% of Americans have steadily increased their share of national assets, while the bottom 50% has seen its share shrink. The large group in between, roughly the 50th to 99th percentile, has been losing ground too. That’s a real, structural trend, and it helps explain why so many people don’t feel like they’re sharing in the boom, even when the aggregate numbers look strong.

As our Director of Research Michael Kon put it, sentiment is real but it’s also volatile. What we watch more closely is “hard dollars”: how much people are actually earning, spending, and saving. That data has been more durable, and it’s what shows up in corporate earnings and broader economic indicators.

Two forces stand out as the main engines behind current growth:

AI infrastructure investment. The industry is on track to invest more than $750 billion this year building out data centers, semiconductors, and the surrounding ecosystem, everything from electricians and HVAC professionals to the energy needed to power it all. Economists estimate this spending accounts for somewhere between 50% and 90% of current economic growth.

Onshoring. Supply-chain lessons from the pandemic, combined with tariff policy and tax incentives, are pushing companies to build capacity domestically. We find that two of our own holdings, Thermo Fisher and Agilent, are exemplary of this this shift.

Both of these tailwinds are likely to persist over the next couple of years, though nothing is guaranteed that far out.

If there’s a genuine risk on the horizon, it’s inflation. The bond market has been signaling concern, and Fed leadership has been vocal about the need to bring inflation down to its 2% target, a goal we’re still far from reaching. If rates continue to rise as a result, it raises the cost of the capital fueling growth in AI and elsewhere, which could eventually slow that growth down.

How you should respond to this environment depends heavily on your time horizon. Short-term investors will naturally gravitate toward whatever is working right now, largely the AI infrastructure trade. But at Summitry, we manage money with a long-term lens. That means looking past the current headlines and considering a range of scenarios, not just the one dominating the news cycle today.

The economy may be booming and uneven at the same time. Both are true, and both matter for how we think about portfolios going forward.

This post reflects perspectives shared at Summitry’s Q3 2026 Investor Update. The views expressed are those of the Summitry investment team and are intended for informational purposes only. The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable.