Economy grows at fastest pace in more than a year, GDP shows, and shows little sign of slowing.

The U.S. economy expanded at its fastest pace in more than a year, according to the latest GDP reading, with little indication of a slowdown. The report points to two engines behind the growth: a boom in artificial intelligence and strong spending by wealthier households.

The AI angle matters because it reflects a capital-spending cycle, not just consumer demand. Investment tied to data centers, computing power and related infrastructure can lift measured output while also shaping which sectors report the strongest activity. Meanwhile, the concentration of spending among higher-income consumers suggests the expansion may be uneven across the economy, since households with less financial cushion are not contributing at the same rate.

For markets, the key question is durability. Strong growth can support corporate earnings, but it also affects how investors think about inflation and interest rates. Watch upcoming data on business investment, consumer spending breadth and price pressures to see whether this pace can be sustained — or whether it reflects a narrower set of drivers.