Cathie Wood says the same technologies poised to unlock a new wave of economic growth could first pressure employment as productivity accelerates faster than labor demand.
In Wood’s 2026 outlook, the ARK Invest chief executive lays out how converging innovation platforms are reshaping the macroeconomic trajectory in stages rather than all at once.
“Convergences between and among the major innovation platforms evolving today—AI, robotics, energy storage, public blockchain technology, and multiomics technology—are likely not only to push productivity growth to sustainable new highs but also to generate significant wealth creation.”
Wood says the near-term impact of those productivity gains may be disruptive for the labor market, particularly in the United States.
“That said, in the short term, technologically- enabled productivity gains could continue to slow employment growth in the US, driving the unemployment rate up from 4.4% to 5.0%+ and encouraging the U.S. Federal Reserve to continue cutting interest rates.”
She notes that the policy and regulatory backdrop could then amplify the effects of easier monetary conditions as the cycle progresses.
“Thereafter, deregulation and other fiscal stimuli should turbocharge the impact of lower interest rates and accelerate GDP growth during the second half of 2026.”
At the same time, Wood expects inflationary pressures to ease rather than intensify, driven by both traditional factors and rapid technological cost declines.
“At the same time, inflation is likely to decelerate, thanks not only to lower oil prices, home prices, and tariffs, but also to the same technologies driving productivity higher and unit labor costs lower.”
She points to dramatic reductions in AI costs as a central force behind that shift.
“Astonishingly, AI training costs are declining 75% per year, and AI inference costs—the costs to run models for AI applications—are dropping up to 99% per year, according to some benchmarks. Unprecedented declines in the cost of various technologies should lead to booms in their unit growth.”
Taken together, she says the combination of productivity gains, modest labor force expansion and low inflation could drive sustained strength in nominal economic output.
“As a result, we would not be surprised to see nominal US GDP growth hover in the 6-8% range during the next few years, thanks to 5-7% growth in productivity, 1% growth in the labor force, and -2% to +1% inflation.”
Earlier this month, U.S. Commerce Secretary Howard Lutnick said that America could witness 6% GDP growth amid a wave of capital spending in the country. He also said that workers will get higher wages in a boom environment.
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