US Faces AI-Driven Inflation Pressure of 0.5% by Year-End, Five Times Higher Than Other Developed Nations: Goldman Sachs

According to Goldman Sachs, on July 12, artificial intelligence investment expansion will subject the US to greater inflation pressure than other major developed nations due to supply constraints. The bank's economist Megan Peters forecasts US core personal consumption expenditures (PCE) inflation could rise by up to 0.5 percentage points by year-end, five times the estimated 0.1 percentage point increase in Canada, Europe, the UK, Japan, and Australia.

Goldman Sachs attributed the disparity to the higher weight of software and computer-related products in the US core PCE basket at approximately 1%, compared to less than 0.5% in other developed economies. The bank expects US software and computer accessories inflation to peak around 30% year-over-year in November, driven by semiconductor supply shortages, AI-enabled software price increases, and rising electricity costs from expanding data centers.