Consumer economy is weak and getting weaker due to high rates, says Jim Cramer

Economic Overview - There are two contrasting economies: a thriving AI economy and a struggling consumer economy, with the latter deteriorating daily [2][19] - AI-related stocks have significantly contributed to market performance, accounting for 75% of S&P's returns and 80% of earnings growth since late 2022 [18] AI Economy - Intel, a semiconductor company, is reportedly seeking funds from Apple to re-enter the AI market, although this has not been confirmed [4][5] - Corewave has expanded its agreement with OpenAI, increasing its total contract value to $22.4 billion, highlighting the robust activity in the AI sector [8] - Meta is constructing a $10 billion data center in Louisiana, which will require significant energy resources, raising concerns about the impact on local consumers [9][10] Consumer Economy - CarMax reported disappointing results, with sales 6% below expectations, leading to a 20% stock plunge; the company may benefit from lower interest rates [12][13] - KB Home is reducing its home construction due to high interest rates, which are critical for the housing market [14][15] - Starbucks announced layoffs of 900 corporate workers and a 1% reduction in North American store count as part of a restructuring plan to improve profitability [16][17] Market Dynamics - The consumer-oriented part of the economy is weak, and without rate cuts, the situation is expected to worsen [19][23] - High interest rates are not a concern for AI companies, which often have substantial cash reserves [23] - Retailers are struggling with excess workforce and store counts, with only large players like Walmart able to compete effectively [21][22]