AI boom buoyed the US economy and softened the blow of war-driven inflation in the first quarter

AI boom supported the US economy and softened the blow of military inflation in the first quarter

Growth in AI investments helped the US economy pass through the first quarter better than expected. GDP added 2% on an annualized basis, and this impulse partially compensated for a new inflationary shock that came along with the war around Iran and a surge in oil prices.

AI drives growth

According to preliminary estimates from the US Bureau of Economic Analysis, in January-March 2026, real GDP of the country grew by 2% on an annualized basis after weak 0.5% at the end of 2025. Formally, growth was supported by several components at once, including exports and government spending, but the main focus shifted toward business.

Consumer spending also increased, however much more moderately than in the classic American model, where households typically drive the economy forward. Business investments in equipment and construction rose by 10.4% — the fastest pace in almost three years.

Particularly notable were increases in investments in computing technology, information equipment, and software. In other words, it is precisely the AI infrastructure, data centers, servers, software, and associated purchases that currently provide the economy with the resilience that was previously more often ensured by mass consumer demand. Against this backdrop, the largest US technology companies plan to continue pouring hundreds of billions of dollars into AI, so the recovery increasingly looks like an investment surge by Big Tech, rather than broad improvement for the entire economy.

• US GDP in the first quarter grew by 2%
• Consumer spending increased by 1.6%
• Business investments in equipment and structures rose by 10.4%
• PCE index in March rose by 0.7% for the month and by 3.5% for the year
• Household savings rate fell to 3.6%

Consumer under pressure

In parallel, another story is intensifying — inflationary pressure. In March, the PCE index preferred by the Fed for consumer spending rose by 0.7% from the previous month, the sharpest jump since 2022.

The annual growth was 3.5%. The reason is largely related to the war around Iran: expensive oil raises the cost of gasoline, logistics, transportation, and raw materials.

Even if people continue to buy basic goods, they have less and less room for discretionary spending. The safety cushion is also getting thinner. The US savings rate in March declined to 3.

6% — a minimum since the end of 2022. Tax refunds and limited layoffs are helping to keep consumption afloat for now, but this looks like temporary support, rather than a new sustainable trend. Companies are already talking about rising costs: airlines are trying to shift some fuel expenses into ticket prices, and retail and e-commerce in places swallow delivery cost increases to avoid losing customers.

If oil remains expensive for long, the pressure will translate into the cost of everyday goods and hit discretionary spending even harder.

"This is an economy on two screens: AI feels good, while the middle class is squeezed," — that's how

American economists describe the current picture.

What this means

The US is currently getting a rare combination: the average consumer is tired, inflation is accelerating again, but the economy still holds on due to AI capital investments. This gives markets and authorities some time to weather external shocks without a sharp collapse in growth. But a model where GDP increasingly depends on the spending of a few technology giants is by definition fragile: if this investment cycle slows down before oil and geopolitical risks recede, the safety margin will quickly disappear. For the Fed and markets, this means a simple thing: the coming quarters increasingly depend not on the breadth of consumer demand, but on the depth of corporate AI budgets.