US growth boosted by AI, but no sign of a turning point higher
SPY•US business investment has boomed as firms race to build data centers and AI capacity, but economists put underlying trend growth at around 2%. Productivity gains remain volatile, and aging demographics and weaker immigration constrain expansion.
1. Growth remains near trend
Economists see the underlying US trend growth rate at around 2%, while quarter-to-quarter growth has not appeared much different from prior years. The Congressional Budget Office sees potential growth slowing alongside population growth, with a noninflationary speed limit of about 1.8%.
2. AI investment lifts output
Business investment has boomed as firms build data centers and AI capacity, with imports of components for those projects continuing to climb. Corporate tax changes under the One Big Beautiful Bill Act have also provided an incentive for capital projects, making business investment a major support for GDP growth.
3. Productivity effects uncertain
Recent jumps in labor output per hour have prompted optimism about AI's potential, but productivity data are volatile and officials are split on whether the gains are attributable to the technology. Economists say it is too early to determine the timing and scale of any lasting productivity boost.
