Iran Situation Casts a Shadow: If AI Stops, Will the Economy Halt Too? The New Dependency Structure of the US Economy

In the spring of 2026, a clear shift appeared in the world's largest economic power.

The U.S. Department of Commerce's Bureau of Economic Analysis announced that the real GDP for the April-June quarter increased by an annual rate of 1.5% compared to the previous quarter. This was a slowdown from the 2.1% growth in the January-March quarter and fell short of market expectations, leading to widespread concern that "the U.S. economy may be becoming unable to withstand the Iran war and high prices."

However, the current figures do not simply indicate an economic slowdown.

While the growth rate appears to be slowing on the surface, domestic demand in the U.S., such as personal consumption and private investment, is actually stronger than in the previous quarter. Furthermore, while AI-related capital investment is a major support for the economy, the semiconductors and equipment imported for this purpose have, in terms of GDP calculations, lowered the growth rate.

Inside the single figure of "1.5%," household struggles, AI investment frenzy, changes in trade structure, and energy shocks from the war are all occurring simultaneously.

This GDP result reflects not only the weakness of the U.S. economy but also its extraordinary resilience and new vulnerabilities.

What does "annual rate of 1.5%" mean?

First, it is important to note that the announced 1.5% does not mean the size of the U.S. economy expanded by 1.5% over three months.

This is an "annualized rate" assuming the growth pace of the April-June quarter continued for a year. In actual quarter-on-quarter terms, it corresponds to about 0.4% growth.

In the U.S., it is common to announce GDP on an annualized basis, but care must be taken when comparing these figures with statistics from Japan and Europe.

Nevertheless, it is true that there was a slowdown from the 2.1% annual rate in the January-March quarter to 1.5%. Many forecasts anticipated growth around 2% before the announcement, so the headline figure left a weak impression on market participants.

However, examining the breakdown of GDP reveals that the entire economy did not uniformly cool down.

The war alone did not slow growth

The original article reported that the U.S. economy slowed more than expected against the backdrop of the Iran war.

The impact of the war on the U.S. economy is by no means small. With a significant reduction in ships passing through the Strait of Hormuz and increased concerns about the supply of crude oil and petroleum products, gasoline prices have risen again. The impact has also spread to logistics costs, aviation fuel, chemical products, and fertilizers.

However, official U.S. government statistics do not attribute the GDP slowdown solely to the Iran war.

According to the Bureau of Economic Analysis, the slowdown from the previous quarter was influenced by a decrease in government spending, a slowdown in capital investment and export growth, and an increase in imports. On the other hand, personal consumption accelerated, partially offsetting the decline in growth rate.

Imports are particularly important.

Imports for the April-June quarter increased by an annual rate of 11.5%, reportedly lowering the GDP growth rate by about 1.5 points. Since GDP measures the added value produced domestically in the U.S., spending on imported goods is subtracted in the calculations.

Therefore, when companies procure a large number of semiconductors and machinery from overseas and use them for data center construction and AI development within the U.S., it may appear as a negative in the GDP for the time being, even if it is an investment to enhance future production capacity.

In other words, the current 1.5% is not a simple figure indicating that "the economy has stopped because no one is spending money."

While the war and high energy costs are burdens, the rapid increase in imports associated with AI investment has made the apparent growth rate lower, reflecting a complex structure.

U.S. consumers are still spending

The most surprising aspect of this GDP report was the strength of personal consumption.

Personal consumption, which accounts for about 70% of U.S. economic activity, accelerated significantly from an annual rate of 0.5% growth in the January-March quarter to 3.2% growth in the April-June quarter.

Despite high prices for gasoline, electricity, food, and housing, consumers continued to spend on shopping and services.

Moreover, excluding volatile items such as government spending, trade, and inventories, the "private domestic final demand," which combines personal consumption and private fixed investment, increased by 3.9%. This was significantly higher than the 1.7% increase in the previous quarter, indicating that the fundamental domestic demand in the U.S. was stronger than the headline GDP suggests.

In that sense, it cannot be concluded that the U.S. has immediately entered a recession.

However, the strength of consumption does not necessarily mean that households have financial leeway.

Some households may be depleting their savings or using credit cards to maintain their standard of living. The expansion of tax refunds and the benefits of rising stock prices are also believed to have boosted consumption, particularly among high-income groups.

While households with significant income and assets can continue spending, low-income groups are heavily pressured by rising prices for essentials such as energy and food. Even if the consumption component of GDP is growing, it does not necessarily mean that the entire nation is becoming equally prosperous.

The strength of the U.S. economy is not equally shared among households.

Gasoline prices are "visible inflation"

The most tangible place for American households to feel the economic impact of the Iran war is at the gas station.

In many regions of the U.S., commuting by car is a fundamental aspect of life, making rising fuel prices an unavoidable burden. For those who cannot choose public transportation, gasoline is not a product whose purchase can be easily reduced just because prices have increased.

If fuel costs rise, it affects not only commuting but also the delivery costs of food and daily necessities, airfare, and delivery charges. If companies pass on the increased costs to prices, high energy costs will return to households as inflation across a wide range of products.

In public opinion polls, 72% of adults considered it "extremely important" or "very important" to prevent the rise in oil and gas prices in the U.S.

Gasoline prices, which are seen daily, are more likely to directly influence voters' decisions than the strategic objectives of the war or diplomatic discussions. As the midterm elections approach, energy prices are becoming not only an economic issue but also a significant political issue for the administration.

AI investment becomes a new engine for the U.S. economy

In contrast to the high energy costs that burden households, AI-related investments stand out in the corporate sector.

Excluding housing, corporate investment increased by an annual rate of 8.4% in the April-June quarter. Spending on data centers, servers, semiconductors, communication equipment, and software is particularly supporting the economy.

With the spread of generative AI, not only giant technology companies but also cloud service providers, telecommunications companies, power companies, and real estate companies are expanding capital investments. The competition to develop AI models has transformed into a massive investment race to secure not only semiconductor purchases but also data center sites, power grids, cooling facilities, and power generation capacity.

However, the increasing reliance on AI investment also carries risks.

If investment in manufacturing plants and general commercial facilities remains weak while only specific technology sectors drive the economy, the backlash could be significant if expectations for the AI market recede.

If companies do not earn as much revenue from AI as expected, semiconductor prices plummet, power supply cannot keep up, or regulations are tightened, capital investment could rapidly shrink.

AI is currently a growth engine supporting the U.S. economy, but it is also becoming a new concentrated risk for the economy.

Has inflation really slowed down?

The price statistics released on the same day showed that the Personal Consumption Expenditures (PCE) Price Index, which the Fed closely monitors, rose by 3.7% year-on-year in June. This was a slowdown from the 4.1% increase in May.

The core index, excluding volatile food and energy prices, rose by 3.3%. Both figures exceed the Fed's target of 2%.

Additionally, for the month of June, the overall index fell by 0.1% from the previous month due to a decline in energy prices. However, this may reflect temporary ceasefire expectations and a rebound in fuel prices, and if conflicts or disruptions in maritime transport expand again, prices could accelerate once more.

Furthermore, when looking at the entire April-June quarter on a quarter-on-quarter annualized basis, the PCE Price Index rose by 5.1%. The figure of 3.7% year-on-year for June and the quarterly annualized 5.1% are not contradictory because they cover different measurement periods.

While energy prices temporarily fell in the most recent month, the pressure for price increases remained strong throughout the quarter.

Fed's dilemma of "economic slowdown and high inflation"

The day before the GDP announcement, the Federal Reserve Board decided to keep the policy interest rate target at 3.50-3.75%.

The decision was 9 to 3, with three district Fed presidents supporting a 0.25-point rate hike. The fact that dissenting votes called for a rate hike, not a rate cut, indicates that concerns about inflation are growing within the Fed.

Chairman Kevin Warsh expressed the view that the U.S. economy is showing "impressive resilience" despite recent shocks. However, he also emphasized that there is no intention to obscure the 2% inflation target.

This is where the Fed's difficulty lies.

If the economy were only slowing down, there would be the option to lower interest rates to ease borrowing burdens for businesses and households. However, if inflation continues due to high energy costs and tariffs, a rate cut could reignite price increases.

Conversely, if the Fed moves to raise rates to curb inflation, it could further cool down interest-sensitive sectors such as housing, automobiles, and corporate investment.

Even if the Fed wants to cut rates to protect the economy, it cannot do so because of inflation. Even if it wants to raise rates to curb prices, the decline in growth rates makes it difficult.

The U.S. economy has not immediately fallen into what is known as stagflation. However, it cannot be denied that it is moving closer to a direction where low growth and high inflation progress simultaneously.

On social media, "slowdown" and "not as weak as the numbers suggest" clash

 

After the GDP announcement, evaluations were sharply divided on platforms like X and Reddit.

It should be noted that the following is a summary of the trends observed in public posts and does not represent a survey of the entire American public.

The most straightforward reaction focused on the fact that the actual figure of 1.5% was below the expected 2.1%, warning that "U.S. economic growth is clearly slowing." There were also prominent views that war, tariffs, and high gasoline prices would eventually become unbearable for households and businesses.

On the other hand, users who examined the breakdown of GDP argued, "It is wrong to judge a recession based solely on the headline."

With personal consumption up 3.2%, corporate investment excluding housing up 8.4%, and private domestic final demand up 3.9%, it was pointed out that the actual domestic demand in the U.S. is rather solid. The argument is that the increase in imports significantly lowered GDP, so the figure of 1.5% alone does not accurately reflect the state of the economy.

A third notable concern was the dependence on AI.

On social media, there were posts questioning how much the U.S. economy could have grown without investments related to data centers and semiconductors. There is anxiety that "if there is a problem with AI investment, the pillar supporting the economy could suddenly disappear."

However, there is also an opposing view. Considering that semiconductor imports related to AI lowered GDP, it is not necessarily the case that growth rates would simply be lower without AI. The headline GDP could even be higher due to reduced imports.

This debate symbolizes the complexity of the GDP indicator.

The fourth point is the criticism of the Trump administration's tariff policy and the Iran war, linking them to policy management criticism. Posts argue that tariffs raised the prices of imports, the war increased fuel costs, and the reduction of the government sector weakened demand.

In response, there were also arguments that political criticism should not be confused with the breakdown of GDP, and the discussions often leaned more towards partisan conflict than economic analysis.

"Strong economy" and "difficult life" can coexist

The most notable feature shown by this statistic is the significant gap between the robustness of the macroeconomy and the actual experience of living individuals.

When companies invest large sums in AI equipment and high-income groups increase spending against the backdrop of rising asset values such as stocks, GDP grows. However, for ordinary households, what matters more than GDP growth rates are the costs of gasoline, rent, food, insurance premiums, and mortgage payments.

Even if consumer spending increases, it does not necessarily mean that more goods and services are being purchased. Spending may increase simply because prices have risen, requiring more money to maintain the same lifestyle.

Real GDP and real consumption are indicators adjusted for price changes, but average values do not fully capture the differences in burdens among households. Lower-income households have a higher proportion of energy and food costs relative to their income, making them more vulnerable to the same price increases.

"It is not a recession statistically" and "Many households feel their lives are worsening" can both be true at the same time.

This discrepancy in perception leads to dissatisfaction with politics and intense debates on social media.

Four future focal points

In considering the future of