Finance and Economics Discussion Series (FEDS)
November 2026
Artificial Intelligence and the U.S. Economy: Current Evidence
Nick Carollo, Leland D. Crane, Daniel Garcia Molina, and Joseph Nichols
Abstract:
We assess the current evidence on how AI-related investment and the use of AI are affecting the U.S. macroeconomy. Specifically, we document the boom in data center capital investment, the current rate of adoption of AI tools in the economy, the impact of the AI-related investment surge on prices, and discuss whether AI tools have affected the labor market and productivity yet. Driven by current and expected future demand for AI services, investment in data centers, both the physical structures and semiconductor chips and other IT equipment inside the structures, has climbed sharply. AI adoption is growing rapidly both among consumers and firms, though most firms are currently not using AI very intensively or at all. AI model-producing firms have also grown extremely fast, and now account for a noticeable fraction of software industry gross output. Prices have climbed in sectors that provide direct inputs to the data centers, such as memory chips. Effects on the labor market so far appear small and somewhat mixed. Similarly, the effects of AI on aggregate productivity growth also appear to be small so far, and the recent pickup in productivity likely reflects factors that predated the diffusion on generative AI.
Keywords: AI, Artificial Intelligence, Data Centers, Investment, Labor supply and demand, Prices, business fluctuations, and cycles
DOI: https://doi.org/10.17016/FEDS.2026.074
PDF: Full Paper
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