Can the AI boom continue to support the US economy? Mark Zandi, a top economist at Moody’s Analytics, isn’t so sure.
Mr. Zandi has raised a number of red flags this year about what he sees as weakening economic strength amid growing headwinds. He said in a post this week that the U.S. could avoid another recession next year, but only if everything goes well.
The main risk he sees is that the economic boost provided by the AI boom will be diminished by another global megatrend: deglobalization.
“The ability of the economy to grow and successfully navigate the crosswinds of deglobalization and AI depends on whether nothing goes off plan,” he said. “Of course, when it comes to tariffs, there are many possibilities.”
Zandi expressed concern that President Trump’s trade policies could accelerate the U.S. into recession. Now, he sees deglobalization as an increasing threat to economic development, as tariffs and restrictive immigration policies raise costs and squeeze labor markets.
AI contributed 0.63 percentage points to GDP growth this year, and without it, Zandi said, the U.S. economy would likely be in recession. But deglobalization will weigh on further expansion next year.
“Deglobalization will continue to be a major drag in 2026, reducing real GDP growth by 1.19 percentage points,” the economist added.
Moody’s Analytics.
He also cited other examples of “breakthrough technologies” that have contributed to growth only when AI is more fully integrated into businesses, noting that the ultimate benefits of AI may not be felt for some time.
Additionally, Zandi expressed concern that even if the AI boom continues to drive up stock prices, the benefits of AI are already largely limited to the wealthy, which could limit its contribution to overall economic growth.
“The already highly skewed income and wealth distribution will become even more skewed,” he predicted. “The economic and political struggle between the haves and have-nots will intensify, to the detriment of all.”
Zandi added that the macroeconomic impact of the U.S. government shutdown could also push the economy off schedule, even as the government prepares to reopen this week.
