Unlocking U.S. Growth in a Post-Pandemic, AI-Driven Economy

The U.S. economy has demonstrated remarkable resilience and adaptability in the post-pandemic era, with real GDP per person returning to its pre-pandemic trajectory by 2023, according to Princeton University Press. This recovery has been fueled by a confluence of factors: robust consumer spending, driven by pandemic-era government aid; within-industry productivity gains, according to a St. Louis Fed study; and the transformative adoption of artificial intelligence (AI) across key sectors. For investors, this evolving landscape presents a compelling case for strategic sector rotation and capital allocation in high-conviction growth equities.

Sector Performance: AI as the Catalyst

The information industry has emerged as a cornerstone of post-pandemic growth, with output per worker surging by 30% from 2019 to 2024, as reported by the St. Louis Fed. This outperformance is directly tied to AI integration and the educational attainment of its workforce, underscoring the importance of human capital in leveraging technological advancements, the St. Louis Fed notes. Similarly, the mining and management of other companies industries have seen significant productivity gains, driven by automation and data-driven decision-making, according to the St. Louis Fed.

The technology sector's equity performance in Q3 2025 further validates this trend. Corporate earnings, bolstered by AI-driven efficiency and demand for cloud services, propelled tech stocks to record highs, according to the Schroders quarterly review. Meanwhile, venture capital activity has increasingly focused on AI and related technologies, with 2024 and 2025 marking a 40% year-over-year increase in funding for AI startups, according to a Rothschild & Co. update. These developments signal a structural shift in capital flows toward innovation-driven sectors.

Strategic Sector Rotation: Prioritizing High-Conviction Opportunities

Investors seeking to capitalize on this paradigm must adopt a disciplined approach to sector rotation. The information industry, with its 30% productivity leap reported by the St. Louis Fed, and the broader technology sector, buoyed by AI-driven earnings growth noted in the Schroders review, represent high-conviction targets. Similarly, the mining sector's integration of automation and predictive analytics offers untapped potential for long-term value creation, as highlighted by the St. Louis Fed.

Conversely, sectors reliant on traditional labor reallocation-such as retail and hospitality-have shown muted growth compared to AI-enabled industries, a divergence the St. Louis Fed documents. This divergence highlights the need to rebalance portfolios toward sectors where technological adoption is not just incremental but transformative.

Capital Allocation: Navigating Risks and Opportunities

While the AI boom presents lucrative opportunities, investors must remain cognizant of macroeconomic headwinds. Inflationary pressures and geopolitical tensions, though tempered by a resilient labor market as noted in the Schroders review, necessitate a diversified approach. However, the Federal Reserve's rate cut in 2025-also discussed in the Schroders review-has provided a tailwind for growth equities, particularly those with strong cash flow generation and scalable business models.

Venture capital trends further reinforce this strategy. The 2024 surge in AI-focused funding reported by Rothschild & Co., coupled with the CBO projection of sustained economic growth through 2028, suggests that early-stage investments in AI infrastructure and applications could yield outsized returns.

Conclusion

The post-pandemic U.S. economy is being redefined by AI-driven productivity and sector-specific innovation. For investors, strategic sector rotation into high-conviction growth equities-particularly in the information, mining, and technology industries-offers a pathway to capitalize on this transformation. By aligning capital allocation with the forces reshaping the economy, investors can unlock durable value in an era defined by technological disruption.