The U.S. economy contracted in the first three months of 2025. According to the Bureau of Economic Analysis, real GDP shrank at an annual rate of 0.3% in the first quarter. That’s the top line number.
Now, direct your attention to another line. Specifically, line 11 of Table 1: nonresidential fixed investment in equipment. That’s econ speak for spending by businesses on things like machines, computer hardware, furniture — and it was up. A lot. A whopping 22.5% from the quarter before, the biggest quarterly increase in nearly five years.
American companies bought a lot of computers in the first quarter. To get specific, business investment in computers and the stuff that goes with them, like monitors and printers, was up nearly 113% for the quarter.
The last time it was this high was in 1983, when desktop computers were becoming a thing that companies wanted to buy in the first place.
Carleton College economics professor Ethan Struby said this reflects the needs of the modern American economy.
“Most of what we produce in the United States is still services, and service providers need computers to do their jobs,” he said.
Think: economists, bankers, journalists.
And Struby said back in January, February, March — the period this data covers — businesses were anticipating new tariffs on electronics.
And so they went ahead and bought tech gear before it got more expensive.
“This was their chance. They took it. Good for them,” said Veronique de Rugy, an economist at George Mason University.
She said this investment doesn’t augur a big increase in production in the coming months. Instead, this was simply companies stocking up.
“To try to actually temper the growth in their cost of doing business in America that they know is coming,” she said.
What businesses didn’t buy as much of was industrial equipment. Investment in big pieces of machinery — stuff that you’d see on a factory floor — actually went down for the quarter.
Unlike a computer, which might run in the hundreds of dollars, one of these machines can cost millions. And Victoria Bloom, chief economist at the National Association of Manufacturers, said companies don’t want to risk buying them right now.
“If they don't know, kind of, what the business landscape will look like,” she said.
And that giant growth in computer investment, by the way, is not sustainable, said Carleton’s Ethan Struby.
He said as long as your employees don’t spill coffee on their computers, they’re not going to need new ones for a couple years.
