Artificial intelligence is boosting investment in the United States, but has not yet changed the growth trend

Washington — Business investment driven by the race to build data centers and artificial intelligence capacity is now a major prop for U.S. growth, which would otherwise look sluggish, according to a Reuters analysis published on Monday.

Economists put the U.S. economy's underlying trend growth rate at around 2%, while the Congressional Budget Office sees a non-inflationary “speed limit” of about 1.8%, in a country with an aging society, low natural population growth and low immigration levels.

President Donald Trump has argued that his policies could double that pace, but quarter-to-quarter growth does not look much different from prior years, the analysis notes.

On trade, steep tariffs have not delivered the expected result: the Supreme Court struck down some of the levies as unconstitutional, although Treasury Secretary Scott Bessent said last week that the administration retains “very durable tariff authorities.” Meanwhile, imports have kept climbing, in part because of demand for components to build data centers for artificial intelligence firms.

The upside surprise is investment: estimates of what is in the pipeline for the artificial intelligence sector run to several trillion dollars, aided also by tax changes that encourage investment in capital projects. At the same time, local backlash against data center projects has become a campaign issue, with voters worried about the impact on their communities and their electricity bills.

On productivity, the picture is uncertain: there have been strong recent jumps in output per hour worked, but the data are volatile and some officials argue it is too early to attribute them to artificial intelligence rather than to changes spurred by the pandemic, such as mobile ordering.

Bessent has argued that productivity-driven growth can ease fiscal problems without painful cutbacks, and Federal Reserve Chair Kevin Warsh has said rising productivity could temper inflation and allow interest rates to fall. Even so, even optimists acknowledge that the timing and shape of the economic gains are yet to be determined: it is too early to call the revolution.

Photo: Archivo A Lo Claro

Source: Reuters