The boom your paycheck missed

Friday’s jobs report was a rout. Employers added 165,000 jobs in October, 100,000 more than economists expected, and the unemployment rate fell to 4.1%. Third-quarter GDP grew at a 3.4% annual rate in the first estimate. By any scoreboard, the economy is producing. Yet here in California, gas topped $6 a gallon in late September, and plenty of families are asking why a boom feels like a squeeze.I’m a husband, a father of three, and a small business owner. Thirty years in investment management taught me a lesson from the other side of the table: When the model says great, and the client says otherwise, believe the client’s statement. My argument fits on a pay stub. The boom is real, paychecks lag it, and the fix is cheap, abundant energy, including the power that the artificial intelligence buildout needs. Freezing data centers would put a major growth engine at risk to settle a billing dispute we can settle by making developers pay their way.The strong side of the ledger comes first. Real final sales to private domestic purchasers, which exclude government spending, trade, and inventories, rose 4.9%. Consumer spending grew 3.8% for the second straight quarter. Unemployment fell even as 421,000 people joined the labor force, and August and September payrolls were revised up by a combined 84,000. Paychecks tell a different story. Average hourly earnings are up 3.1% in the 12 months through October. Consumer prices rose 3.7% in the 12 months through September, and real disposable income fell 0.3% in September. Stripping out food and energy, CPI inflation was 2.6%, so the damage has an address: gasoline, up 34.2% in a year. AAA blames volatility in the Strait of Hormuz and expensive crude. Washington can’t reopen a shipping lane.The boom’s other engine runs on electricity. Treasury estimates that investment in software, computing hardware, and data centers, above its trend before large language models, accounted for nearly 30% of GDP growth over the first three quarters of 2026, and data center spending grew at a triple-digit pace last quarter. Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) want to stop it. Their March bill would halt AI data centers nationwide until Congress writes new safeguards. Their worry about bills deserves a hearing, since the Energy Information Administration expects residential electricity prices to rise nearly 5% this year. A freeze, though, risks pushing the buildout overseas. We’re going to need a bigger boat, as Chief Brody might say. Make it a bigger grid.In AEP Ohio’s service area, new data centers of 25 megawatts or more must pay for at least 85% of the power they reserve, for up to 12 years, used or not. At least 23 states have approved similar large-load tariffs. In March, seven tech giants signed a White House pledge to fund their own generation and grid upgrades, but it’s voluntary, which makes it a suggestion with letterhead. Milton Friedman titled a 1975 book There’s No Such Thing as a Free Lunch. Ratepayers shouldn’t cover the tab. States should copy Ohio. Congress should clear the permitting path for the generation, transmission, and pipelines that serve these buildings.CONGRESS CAN’T REFEREE ITSELFSkeptics have fair points. Unemployed workers are waiting an average of 27.1 weeks to land a job. Moody’s Analytics estimates the top 20% of earners drive nearly 60% of spending, and a single investment boom supplies much of the growth. I agree the base is too narrow. Widening it means more lanes, and lanes take electricians, linemen, and welders.Thomas Sowell put it plainly: “The first lesson of politics is to disregard the first lesson of economics.” A data center freeze disregards it. I’ve coached hurdlers who exploded out of the blocks and clipped the first barrier. The economy is that runner right now. Tuesday’s October inflation report will show whether pay is catching up. Build the supply, and the paycheck has a fighting chance of matching the scoreboard.Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He writes about issues in finance, constitutional law, national security, human nature, and public policy.