Catenaa, Saturday, October 17, 2026- US non-AI economy is growing at around 1%-1.5% as AI related activity contributes to third of US economic growth, Moody’s Analytics said.
In an interview with Goldman Sachs Research, Mark Zandi, Chief Economist of Moody’s Analytics said that US Real GDP growth is running at 2% yoy, but estimates that AI-related activity accounts for roughly one-third of that, or around 0.6–0.7pp.
Zandi attributed approximately half of AI’s estimated contribution to US economic growth to infrastructure investment, after accounting for imported electronic equipment. He linked the remaining contribution to rising equity valuations, arguing that gains in AI-related stocks have increased household wealth and supported consumer spending, particularly among affluent Americans.
“So, the non-AI economy is growing at only around 1%–1.5%. That’s a pretty punk economy, and a difficult place to be,” he said.
Moreover, he said that softnes seen in the US economy is in the labor market, as monthly payroll growth has averaged around 40,000 over the past year and has been essentially zero when excluding the healthcare sector.
Zandi argued that weak recruitment activity and limited working hours point to underlying labor-market difficulties. He also suggested that declining participation in the workforce has helped keep the official unemployment rate relatively low.
“Adjusting for that cyclical drop would put underlying unemployment in the mid-4% range, above the level consistent with full employment, and I expect the headline rate to move toward that level over the next 6-18 months,” he added.
Zandi said that real wage growth is, at best, flat, and for many Americans is declining, eroding purchasing power, particularly for lower- and middle-income households, who are increasingly drawing down savings to sustain spending.
Therefore, he said that while the economy is still growing, the underlying labor market and household fundamentals point to very tenuous growth.
“While I expect another hike this year, with the economy already barely growing at potential, additional hikes could push growth below potential,” Zandi said, “That would further strain the already weak non-AI economy and trigger layoffs, significantly raising the likelihood of a self-reinforcing negative spiral.”
