AI market differs from bubble, companies have business models and profits, says Fed Chair Powell

Economic Growth and AI Investment - The economic growth observed is significantly driven by investments in AI, raising concerns about the impact of a sudden contraction in tech investment on the overall economy [1] - Unlike the dot-com bubble of the 1990s, current highly valued companies possess earnings and established business models, indicating a more stable economic environment [2][3] Consumer Spending - Consumer spending remains a substantial component of economic growth, outpacing the contributions from AI investments, with continued growth despite negative forecasts [3] - The current consumer spending trend appears to be skewed towards higher-end consumers, yet it still represents a major portion of economic activity [3] Labor Market Dynamics - The labor market is experiencing a slowdown due to a sharp decline in the supply of workers, primarily attributed to immigration issues and lower labor force participation [4] - The reduced supply of workers has led to decreased demand for new jobs, as fewer individuals are available to fill positions [4] Economic Growth Rate - The economy is projected to grow at a slower rate of approximately 1.6% this year, down from 2.4% last year, with potential for higher growth if not for recent shutdowns [5]