AI is only "part" of high U.S. productivity growth, says Stripe economist
Summary
U.S. productivity has increased significantly in recent years, but this rise is mostly due to better use of existing capital, like equipment and facilities, rather than major gains from artificial intelligence (AI). AI is helping improve efficiency in some sectors, but it is not yet the main cause of the overall economic productivity growth.Key Facts
- U.S. labor productivity (output per hour worked) rose 2.5% last year, higher than the 1.6% average over the past 20 years.
- The increase in productivity mainly comes from using existing capital more intensively, such as factories, servers, and hotel rooms.
- Total factor productivity, which accounts for both labor and capital together, has stayed mostly flat.
- Industries that adopted AI earlier showed productivity growth before the pandemic, indicating AI is not the sole driver.
- Economists call increased use of capital "capital intensity" or "capital utilization."
- AI may contribute to future productivity growth by solving workflow problems, but its current impact is limited.
- The rise in productivity is real but may not yet reflect a permanent, transformational change caused by AI.
- Understanding AI’s role will help predict if productivity gains are temporary or long-lasting.
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