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US Productivity Surges: Is AI Finally Driving Growth?
16 Feb
Summary
- Economists debate if AI's productivity impact follows a J-curve pattern.
- US productivity saw a significant jump in 2025, nearly doubling the average.
- Early AI adoption is driving end-to-end workstream automation for some.
The discourse around the K-shaped economy is now intertwined with the J-curve effect as AI's potential impact on productivity is debated. This economic theory posits that general-purpose technologies like AI require substantial initial investment, leading to a temporary dip before productivity accelerates. Economist Torsten Slok noted AI is "everywhere except in the incoming macroeconomic data," referencing the lack of clear evidence in employment and inflation statistics.
However, Erik Brynjolfsson, an economist at Stanford University, views recent Bureau of Labor Statistics revisions as evidence of an AI-driven productivity surge. The updated figures for 2025 job gains, revised downwards to 181,000, combined with healthy economic expansion and a 3.7% GDP growth in the fourth quarter of 2025, suggest a significant productivity increase. Brynjolfsson's analysis indicates U.S. productivity rose to approximately 2.7% in 2025, nearly double the 1.4% average of the past decade.
This suggests a transition from an investment phase to a "harvest phase" where AI's benefits become measurable. While widespread impact is yet to be confirmed, a "small cohort of power users" are already automating entire workstreams, completing tasks in hours instead of weeks. This indicates a shift from AI experimentation to "structural utility," highlighting an upcoming economic transformation. In the ICT sector, output rose even as employment fell, further suggesting AI's significant contribution to productivity growth.
