The U.S. economy is slowing, but AI might stem the tide
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Annelise Capossela/Axios
Economic growth in the U.S. is expected to decline over the next decade, but there's a bright spot: AI, according to new projections from The Conference Board out Thursday morning.
Why it matters: While fears of AI causing sweeping job loss are driving mass anxiety at the moment, the report offers a more nuanced perspective.
- A growing economy is important for a raft of reasons — it creates jobs, raises living standards and brings innovation.
By the numbers: The Conference Board forecasts that U.S. GDP growth will expand at an average rate of 1.9% year-over-year between 2025 and 2039.
- From 2000 through last year, the average rate was 2.4%.
The big picture: The projected slowdown in economic growth reflects an aging population, stricter immigration policies and rising fiscal pressures, the authors write.
- These headwinds will be partially offset by robust capital investment — spending by businesses on long-lasting stuff like technology, buildings and machines.
- Plus, productivity is growing — driven by AI and government spending kicked off under the Biden administration and not yet entirely pulled back.
- The Conference Board calls this "capital deepening."
- It is "the growth engine," says Yelena Shulyatyeva, a senior economist at the organization who wrote the analysis.
Between the lines: A lot of the AI discussion right now centers around chatbots, Shulyatyeva says.
- But this is more about using AI in manufacturing, construction and other sectors.
- Broader adoption in those arenas could do for the economy what computerization did back in the 1990s and 2000s, she says.
What they're saying: "U.S. growth is poised to downshift over the next 15 years, but advances in AI and other emerging technologies could deliver a meaningful productivity boost," Dana M. Peterson, chief economist of the business group, said in a press release.
Zoom in: Behind the slowdown in the economy is the labor market — long a key driver of economic growth.
- Labor's role is diminishing as the U.S. population ages — by 2030 there will barely be enough new workers to replace all the retiring folks, the analysis notes.
- Typically, immigration makes up for some of that, but that's in question with the Trump administration crackdown on immigration.
Reality check: This is a projection. A lot can change in the coming years.
- And even if long-term AI leads to increased growth, that doesn't mean there won't be pain for those displaced by technology.
