Wolfe Research suggests the U.S. economy may face a widening gap between optimistic growth projections and slowing population trends. This raises pressure on productivity, with artificial intelligence (AI) seen as a key driver. Treasury Secretary Scott Bessent has cited potential real GDP growth of 4-5% alongside 7-8% nominal growth, signaling ambitious targets for the coming years.

Population growth deceleration is a major concern. Estimates show net international migration decreased, contributing to only 0.5% population growth in 2025. Wolfe Research anticipates only 0.2% growth in 2026. Consequently, achieving the high growth forecasts hinges on substantial improvements in productivity to offset the impact of slower population increases.

Wolfe Research forecasts AI could boost labor productivity by roughly 40 basis points annually over the next decade. During the adoption phase, the annual boost could peak at nearly 70 basis points. If these projections hold, it could bring productivity levels close to those of the 1990s and just behind the 2000s.

This matters because sustained economic growth depends on productivity gains. If AI can deliver, it could help the US economy achieve the growth targets. However, the success of these forecasts depends on the pace of AI adoption and its ability to offset the effects of slowing population growth. Investors should watch companies that are investing heavily in AI.