Investing.com — Yardeni Research said growing evidence suggests the artificial intelligence boom is extending beyond major technology companies and into the broader U.S. economy, supporting hiring, business formation, and investment despite ongoing geopolitical and inflation risks.
Recent economic data indicate AI is acting as a tailwind for growth rather than the labor market disruption many investors feared. The firm said several indicators point to increasing economic benefits from AI adoption across a range of industries.
Labor market data provided one of the strongest signals. Job openings rose to 7.62 million in April, the highest reading since May 2024 and the largest monthly increase since 2020. The number of available jobs now roughly matches the number of unemployed workers, reflecting stronger demand for labor.
Small businesses played a major role in that increase. Job openings at firms with one to nine employees jumped 69% from the previous month, while professional and business services recorded a 64% surge. Yardeni said the trend could reflect the creation of new AI-driven businesses, supported by continued growth in business applications.
Manufacturing activity has also improved. The ISM manufacturing PMI climbed to 54.0 in May, its highest level since 2022, while both new orders and production remained in expansion territory. The data point to continued strength in industrial activity despite economic uncertainty.
At the same time, inflation pressures remain elevated. The ISM prices-paid index held at 82.1 in May, suggesting businesses continue to face rising costs that could complicate the Federal Reserve’s policy path.
Construction activity is also benefiting from the AI buildout. Total construction spending rose for a second straight month in April, helped by rapid growth in data center development as companies invest heavily in computing infrastructure.
Consumer demand has remained resilient as well. The Redbook same-store retail sales index recently reached its highest level since late 2022, while the Atlanta Fed’s GDPNow model continues to project solid second-quarter growth despite a recent downward revision.
Even with those positive trends, the firm remains cautious on the near-term market outlook, citing Middle East tensions, the risk of higher oil prices, potential Fed tightening, and several large upcoming IPOs as factors that could increase volatility in the weeks ahead.
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