U.S. Economy Posts 2% Q1 Growth as AI Investment Helps Absorb 4 Shocks

1 articles · Updated · businessjournaldaily.com · May 19

2% first-quarter U.S. growth showed the economy staying resilient despite shocks from Covid-19, the Ukraine war, tariff pressure and the U.S.-Iran conflict, Huntington economist Olu Omodunbi said.
AI-related business spending helped drive that growth alongside consumer demand, even as higher gasoline prices and broader uncertainty began weighing on households.
3.8% April inflation, up from 3.3% in March, could keep the Federal Reserve from cutting rates soon if energy costs spread into manufacturing, transport and other sectors.
2.5% growth is Omodunbi’s full-year 2026 forecast, though he said a sustained energy-price spike could curb spending; he also said the labor market has stabilized nationally after late-2025 concerns.
Youngstown still trails its pre-pandemic employment level even as U.S. jobs run about 4% above and Ohio about 1% above, highlighting weaker local population growth despite positive migration.

With fiscal stimulus and foreign conflicts pushing up prices, can the central bank still achieve a soft landing?

Is massive AI investment building a stronger economy or a future with widespread job displacement?