Archive · 3 Oct 2025
AI, Productivity and Economic Growth: Is a Boom Coming?
The economy is growing quickly, but job growth is slow.
This has led to a rise in productivity, meaning more output per worker.
One possible reason is the use of AI, which is rapidly being adopted.
However, it's not clear if AI has caused a productivity boom yet.
Economists are comparing this to the internet boom of the 90s, where investment in new technology boosted productivity.
Some predict that AI could boost productivity and economic growth.
However, others warn of factors that could prevent this, such as de-globalization and aging populations.
It is still early days, but the trend in productivity gains is being observed.
GDP grew at 3.8% in Q3, while employment growth was weak.
Productivity has grown about 2% annually for the past two years.
Rapid AI adoption is occurring in businesses.
AI investment is currently rising faster than internet investment during the dot-com boom.
Economists debate AI's impact on productivity and the economy.
- Who
- Economists and Analysts
- What
- Analyzing the relationship between productivity, AI, and economic growth, particularly the potential for a productivity boom.
- When
- Recent data and projections
- Where
- Focusing on the US economy.
- Why
- To understand if a productivity revival is occurring due to AI, and the potential impact on economic growth and inflation.
- GDP Growth (Q3)
- 3.8% (annualized)
- Productivity Growth (2 years)
- 2% (annualized)
- AI adoption (employees)
- 19% use AI a few times/week (June)
- Citi estimate of AI spending rise
- 0.9% of GDP annually since 2023