Some economists are depressed by job market weakness and tariff jitters. But one thinks that the coming boom in artificial intelligence could energize the economy just as it’s starting to lose momentum. 

“I believe tailwinds from AI will continue to drive investments and fill cracks in the U.S. economy,” Capital Group Economist Jared Franz wrote in a recent note.

While he acknowledged that there are reasons to worry about the economy, Franz laid out four signals that indicate the U.S. economy could stay resilient in the coming months.

AI Spending is Booming

Tech companies have spent hundreds of billions of dollars building out AI infrastructure, especially data centers.

Spending on AI could help keep the economy humming, even if it raises worries about a “bubble” like the one that ended the 1990s dot-com boom. But while an “AI winter” may still be on the horizon, it won’t be the kind of meltdown that followed the massive spending on Internet infrastructure more than two decades ago, Franz wrote. 

“Unlike the dot-com bubble, today’s companies are flush with cash and have robust earnings,” Franz wrote.  

Labor Markets Are Evolving

Between 1970 and 2015, the personal computer and the Internet were responsible for eliminating 3.5 million jobs in careers like typing, bookkeeping, and auditing. But over that same time period, computer technologies created 19.3 million new jobs, Franz said, citing a McKinsey & Company report.

“AI is likely no different, and we are witnessing some AI-related job displacement,” Franz said. 

This restructuring is starting in the tech sector, Franz wrote, noting that many of the recent layoffs have occurred at companies that overhired during the pandemic. Now that they’re spending more to bring in AI talent, many tech firms are letting go of other employees as they seek to preserve their profit margins. 

“It’s no coincidence layoffs are concentrated in tech companies heavily investing in AI,” Franz said. 

However, this shift in the labor market isn’t likely to drive up unemployment.

“The next few months could shed more light on the trajectory of job markets, but for now, I don’t see evidence of widespread pain,” Franz said.

Productivity is Improving

Even as inflation remains elevated and the unemployment rate ticks higher, American workers are getting more done per hour of work. Worker output per hour rose at an annual rate of 2.4% in the 2025 second quarter, bouncing back from a downturn in the first quarter.

And thanks to AI, productivity could continue to improve, Franz wrote. He projected that productivity could rise at an annual rate of 4% over the next five years, well over the historical average of around 2%. 

“AI may have already ushered in a new era of exceptional productivity,” Franz wrote. “This increase is constructive for GDP and may even help moderate inflation.”

Corporate Earnings, Consumer Spending Remain Healthy

Even as he sees the optimistic side of the economy, Franz acknowledges that there are real concerns about economic growth.

Persistently high inflation, weak job creation and a weakening gross domestic product (GDP) are part of this trend, which could get worse as the full effects of President Donald Trump’s tariffs begin to kick in. 

But Franz said that recent economic weakness was more likely the result of economic cycles, rather than a signal that an economic slowdown is coming. 

“Company earnings have also generally held up, with some reporting healthy consumer spending, particularly among higher-income customers,” Franz said.

He said the expected interest rate cuts from the Federal Reserve could also help “steer the economy out of a rough patch.”