New productivity growth numbers consistent with the view that we remain almost exactly on the course that was expected prior to COVID. No evidence of an AI inflection in these data--at least not yet.
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Productivity has grown at a 1.8 percent annual rate this cycle. This is faster than the previous cycle (which forecasters expected, productivity growth was already picking up in 2018 and 2019). But still below the post-war average.
Here are various quarterly numbers from the release--most importantly unit cost growth remains above the 2% you would expect to be consistent with 2% price inflation.
Much uncertainty on AI/s impact but based on the literature my best guess is +0.5pp for annual productivity growth. But: (1) short-run could hurt as labor goes into future-oriented innovation and (2) not clear what the 0.5 should be added to, baseline absent AI likely <1.5%.
Yeah, most likely AI is a technological improvement that is increasing our economy, but as with the dotcom era this is well represented by existing linear trends in technological improvements for the economy.
Yes. A conceptual mistake people make is if something is, say, +0.5% then they add that to the recent (log) linear trend. But new innovations like AI are part of why we've had the (log) linear trend we've had. Without them productivity growth would be 0%.
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