Axios

One of the final snapshots of how Americans feel about the economy before voters head to the polls in the midterm elections shows a nation still deeply frustrated by the cost of living.

By the numbers: The University of Michigan's consumer sentiment index registered 48 in October, virtually unchanged from September's 48.1 and revised higher from a preliminary reading of 46.3.

• That initial estimate was the second-lowest in the survey's history, behind the all-time low hit in May.
• Even after the upward revision, sentiment remains 10% below its level this time last year.

Zoom in: Beneath the flat headline reading, consumers grew more pessimistic about current economic conditions, with that index falling more than 4 points to 46.7.

• Buying conditions for durable goods plunged 18% amid high prices and rising borrowing costs — accounting for the entire decline in consumers' assessment of current economic conditions.
• "Purchasing power continues to dominate consumer views of the economy," Joanne Hsu, director of the survey, said in the release.
• But consumers' outlook for the future improved, with the expectations sub-index rising 2.5 points to 48.8.

The intrigue: Separate data released alongside the index showed that the share of Republicans citing high prices as a drag on their finances has surged roughly 50 percentage points since January, a much larger increase than among Democrats or independents.

• The increase was also especially pronounced among consumers with little or no stock wealth.

The bottom line: Americans don't feel much worse about the economy than they did last month. But their already bleak outlook isn't improving, either.

• The Conference Board releases its October consumer confidence survey Tuesday — one week before Election Day.

AI tools have become shockingly good at carrying out much of the work produced by the economic profession — from the most elite halls of academia to think tanks, government agencies, consultancies, research shops and humble newsroom economics teams.

The big picture: This fact raises important — and, we confess, unnerving — questions about the role of humans in making sense of the economy.

On a recent evening near a secure U.S. facility, three federal agents saw a flying object they couldn't identify: a large "matte black triangle" that moved as fast as a fighter jet, made no sound and then disappeared, according to FBI and Defense Department reports.

Why it matters: The 15-foot flying triangle is classified as a UFO-like "Unidentified Anomalous Phenomena" because the U.S. doesn't have the technology to make such a craft — and neither do its adversaries.

Here's a surprising combination of words: Municipal bonds are sexy right now — offering historically attractive returns at a time when states and localities need more and more cash.

Why it matters: That may be good news for investors, but it costs taxpayers who foot the bill when states and localities borrow money by issuing these bonds.

Mark Zuckerberg's Meta got smacked around Thursday after reporting earnings that looked pretty strong at first glance.

Why it matters: Its drubbing in the stock market — Meta ended down 7% —suggests that investors are growing concerned that Big Tech's insistence on pouring more and more capital into data centers could end up costing them in the long run.

America's largest banks are working to prevent AI worst-case scenarios. But they're also preparing for the "day after" a catastrophe, Axios has learned.

Why it matters: America's financial institutions have joined the largest AI companies in scenario-planning for disaster, a prudent but worrisome signal about the extent of the risk that major corporations see on the horizon.

Your neighborhood's next hot bakery — or coffee shop, pizza joint or BBQ spot — might be inside someone's house.

Why it matters: More people are turning their home baking into a business, as online platforms and loosening state regulations make it easier for home cooks to reach customers.

That wince you just made while researching travel options? Get used to it.

Why it matters: Soaring jet fuel prices are accelerating changes across the airline industry, seen in higher fares, premium-heavy cabins and fewer flight options for travelers.

The unrelenting sell-off in French bonds continues. The latest move shows how that nation's precarious fiscal and political situation could spill over elsewhere — including offering relief for U.S. borrowing costs.

The big picture: U.S. Treasury yields have fallen in the last couple of weeks, while French borrowing costs have surged. Borrowing costs are also down in other traditional safe-haven nations.

• This may partly reflect investors seeking alternatives to French bonds, alongside a broader safe-haven effect as there have been new wobbles in AI-related debt markets.

A recent Pew Research Center survey found that 61% of Americans believe there's too much economic inequality, unchanged from 2019.

• But among those who see too much inequality, 24% now say the economic system needs to be completely rebuilt to address it, up from 14% in 2019.

Why it matters: The vibe shift reflects more people demanding major changes and debating what they should look like, and who gets to shape them.

American manufacturing is showing signs of revival. But the recovery is being powered by industries at the forefront of the AI and energy boom while the traditional factory sector gets left behind.

Why it matters: The White House is touting a revival in American manufacturing as evidence that its economic agenda is working.

• But a lopsided recovery raises questions about how much of the sector stands to benefit — especially as higher borrowing costs threaten to weigh on factories once again.

The U.S. Embassy in Canada accused Canadian leaders of "openly" describing plans to "influence American politics," doubling down on Ambassador Pete Hoekstra's claims of potential election interference.

Why it matters: The accusation further deteriorates Washington's relationship with its northern neighbor under President Trump's costly trade war that's put political pressure on Republicans.

Prices for tokens — a measure of AI usage — have tumbled in recent months.

Why it matters: The price drop raises questions about the strength of an AI boom fueled by supposedly bottomless demand for computing power.

Kalshi is asking federal regulators for permission to re-list compute derivatives, which would allow users to trade on the future cost of renting GPUs, the powerful chips used to run AI.

Why it matters: The prediction market was reportedly ordered by the Commerce Department to take down compute markets earlier this year over national security concerns. (Commerce denied that it did so.)

Driving the news: Sudhir Jain, Kalshi's chief compliance officer, said Wednesday on LinkedIn that Kalshi had submitted comments to the Commodity Futures Trading Commission asking it to allow the markets.

• That would ensure that "price discovery" on GPUs happens in the U.S., not offshore, he argued.
• "Compute already fits the definition of a commodity" and "both sides have a reason to hedge" on compute pricing, Jain wrote. "Buyers like AI labs can lock in costs. Providers like data center operators can protect the revenue behind their GPU investments."

What they're saying: The CFTC declined to comment.

Catch up quick: The agency sent a request for public comment on compute contracts in August.

• "Just as American markets helped establish the gold standard for trading the commodities that powered the industrial economy, we will do the same for the commodity that will power the intelligence economy," CFTC chair Michael Selig said at the time.
• The comment period ended Tuesday.

Only about four in 10 American workers say that they have a decent job, finds a new survey on job quality from Gallup out Thursday.

Why it matters: Bad jobs aren't just a misery for employees — for companies, they're linked to costly turnover and higher health care expenses.