2 min read Economy & Policy

Why the "AI-Blinded Market" Might Be Missing the Slow-Motion Economic Crash

Satirical illustration showing an AI-driven city on the left and a bleak economy on the right, with a crack in the middle labeled “50.1” to signify economic divergence.
A split view of the AI-powered boom and the struggling real economy. “50.1” marks the crack between optimism and stagnation.

Summary

July’s ISM Services PMI came in at 50.1 — dangerously close to contraction territory. Employment fell sharply to 46.4 (lowest since the pandemic), while prices paid surged to a multi-year high. Meanwhile, the stock market is still partying like it’s 1999, thanks to AI hype. So... what if the real economy is quietly slipping into stagflation while everyone’s busy prompt-engineering their portfolios?

Introduction: AI is hot. Services? Not.

Wall Street is head-over-heels for AI. But the real economy? It’s sending breakup texts.

The July 2025 ISM Services PMI dropped to 50.1, well below expectations (consensus was 51.5). Employment? Down to 46.4 — four contractions in five months. Prices paid? Up to 69.9, highest since 2022. That’s not a soft landing. That’s a plane skidding off the runway with Taylor Swift still on the wing.

And yet, the Nasdaq keeps floating upward, carried by Nvidia, Super Micro, and a dozen GPT-powered pipedreams. The disconnect is real — and getting weirder.

Derek from TrendFoundry

Derek from TrendFoundry

Breaks down AI, tech, and economic trends—usually before your boss asks about them. Founder of TrendFoundry. Writes like a smart friend with too many tabs open. Still refuses to call himself a “thought leader.”
San Diego, CA, United States