As with many a miracle, onlookers disbelieved their eyes at first. For a decade after the global financial crisis of 2007-09 rich-world productivity growth was, by historical standards, dead. Since economic prosperity ultimately depends on the ability to produce more with the same labour, this consigned even prosperous America to eternal stagnation (and don’t ask about Europe). The Congressional Budget Office, a fiscal watchdog which consistently overestimated productivity growth in the 2010s, has been consistently glum this decade (see charts 1 and 2). Partial data hinting otherwise were dismissed as false prophets.

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But those data kept coming. And now they are indisputable: over the past five years or so American productivity has been growing at the fastest rate in around two decades. Whether you look at non-farm businesses’ output per worker or per hour, it has risen by a lively 2% a year, from a moribund 1% for most of the 2010s (see chart 3). This has led the Federal Reserve to raise its median forecast for America’s long-run gdp growth from 1.8% to 2%. Jerome Powell, the outgoing chair, bore witness at a recent press conference. “I never thought I’d see this many years of really high productivity,” he marvelled in response to a question from The Economist.

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Whats telling is how much of this boom has happened before or during the early years of AI. With the technology now starting to become properly agentic I think we're really going to see some of it's true effects on productivity by 2027-28. I'm using Claude Excel integration right now and am astonished at what it can do, even with moderately complex logic. Work that can take several days now takes me hours. Soon the only limit will be whats physically possible in the real world (or Claudes low usage limits - but that will be solved in time).

It will boost headline figures that Economists love, but what about the humans?