Electricity prices rising by double the rate of inflation. Data center demand means no relief ahead, analysts say

Families won’t see relief from rising electricity prices anytime soon, as demand from artificial intelligence data centers soars while power supply grows slowly, according to Goldman Sachs.

Electricity prices jumped 6.9% in 2025 year over year, more than double the headline inflation rate of 2.9%, Goldman analysts told clients in a research note published Wednesday.

Prices will continue to rise through the end of the decade, as data centers make up 40% of electricity demand growth, the analysts said. This will lower disposable income, drag down consumer spending and slightly slow economic growth in the coming years, they said.

Households will see electricity prices rise an additional 6% through 2027, the analysts said. Price inflation will then slow to 3% in 2028 on lower natural gas prices, they said. Consumer spending growth will fall 0.2% through 2027 and economic growth will slow 0.1% as a result, according to Goldman.

The trajectory of electricity prices, however, will vary widely across the U.S. based on different regional market structures and what regulatory choices are made, the bank said.

“The income and spending drags will likely be larger for lower-income households because electricity accounts for a greater share of their spending,” Goldman analyst Manuel Abecasis said. Households in regions with more data centers will also take a bigger hit, he said.

Higher electricity prices will increase core inflation by 0.1% through 2027 and by 0.05% in 2028 as businesses pass on higher costs to consumers, the Goldman analysts said.

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