Inflation Stabilizes, But Confidence Wavers—How IT Providers Can Navigate the Shift

In March 2025, inflation showed signs of relief with a two-tenths percent rise in the Consumer Price Index last month, following a half percent spike in January. Over the past year, inflation rose two point eight percent, the lowest rate since November. Core inflation, excluding food and energy, increased three point one percent year-over-year, marking the lowest since inflation surged nearly four years ago. However, the Federal Reserve remains cautious, as core inflation is still above their two percent target. Grocery prices were flat last month, despite a significant ten percent increase in egg prices, which are up fifty-nine percent over the past year.

Recent findings from the University of Michigan’s sentiment survey reveal a concerning decline in U.S. consumer outlook, with the sentiment index dropping to 57.9 in March 2025, a decrease of about eleven percent over the month. This marks the third consecutive month of decline and the lowest level since the fall of 2022. Notably, sentiment diminished across all demographics, including age, education, income, and political affiliation, with Democrats experiencing a significant twenty-four percent drop. Inflation expectations have also surged, with respondents anticipating a rate of four point nine percent over the next year, up from four point three percent the previous month.

In the fourth quarter of 2024, shipments of artificial intelligence-capable personal computers reached 15.4 million units, which is 23 percent of all PC shipments during that period. This growth marks an 18 percent increase from the previous quarter, according to data from Canalys, now part of Omdia. Apple led the market with a remarkable 54 percent share of AI-capable PCs, followed by Lenovo and HP, each holding 12 percent. The demand for these devices is expected to continue, driven by the approaching end of support for Windows 10, which has been identified as the primary factor influencing refresh decisions for many customers, as reported in a January poll of channel partners by Canalys.

A recent global survey conducted by Lenovo, involving 600 IT leaders, reveals that while nearly eighty percent believe artificial intelligence will enable employees to focus on more impactful work, less than half feel their current digital workplace solutions adequately support productivity and innovation. The survey indicates that a staggering eighty-nine percent say organizations must first overhaul their digital workplace to fully unlock the potential of AI.

A recent survey conducted by Omnisend reveals that thirty-nine percent of shoppers abandon their purchases due to frustrating interactions with artificial intelligence chatbots. While eighty-eight percent of consumers reported having at least one conversation with an AI chatbot in the past year, only twenty-eight percent believe that these systems consistently understand their needs. According to Paulius Milišauskas, Vice President of Customer Experience at Omnisend, many retailers may be incurring higher costs due to poor chatbot implementation, as forty-eight percent of consumers are seeking improved customer service quality from AI. The survey highlights that consumers prioritize accuracy over speed, suggesting that retailers need to rethink their strategies and view AI as a tool for enhancing customer experience rather than just improving efficiency. The findings indicate a growing need for hybrid support models that combine AI capabilities with human representatives for complex inquiries.

Why do we care?

It’s the vibe that I’m worried about, and primarily due to the impact on provider’s customers.    Economic caution will influence IT spending decisions. Businesses are navigating uncertainty, so demonstrating ROI and cost efficiency in tech investments is key.   From a service provider perspective, this means being cautious about growth projections. A softening economic outlook may impact new client acquisition and contract renewals. However, with inflation stabilizing, cost pressures on IT services and hardware may ease slightly. The disconnect between falling inflation and rising consumer pessimism means IT leaders should watch for continued volatility in business confidence and spending patterns.

Despite the excitement around AI PCs, the actual business case remains unproven. Many customers might be upgrading for Windows 11 compatibility rather than AI features. IT leaders should be cautious about overpromising AI benefits that aren’t fully realized yet, particularly as the Omnisend data shows how AI implementation can backfire if not executed properly.  Poor AI experiences damage brand trust.
This is a moment for IT providers to lead with education and strategy. The appetite for AI is there, but execution remains a challenge—helping businesses bridge that gap will be a winning approach.