U.S. Workers Are Becoming More Productive Than Ever. Economists Say AI Isn’t the Main Reason Yet
American workers are producing more output than they have in decades, but economists say artificial intelligence is not yet the primary force behind the surge, a new report shows.
Instead, a combination of digital transformation, remote work, tight labor markets and years of technological improvements appears to be driving one of the strongest periods of productivity growth in more than 20 years, according to an analysis by The New York Times.
Many executives argue that today’s productivity gains began well before the explosion of generative AI tools. Henry McVey, chief investment officer at private equity giant KKR, said the improvements stem from changes that accelerated during the COVID-19 pandemic, including cloud computing, digital records, machine learning and remote work.
“I believe the productivity gains began coming out of Covid with the digitization of work, remote work and the implementation of machine learning, and we’re just scratching the surface on A.I.,” McVey said.
Another key factor has been one of the strongest labor markets in modern history. U.S. unemployment has remained at or below 4.5% since October 2021, forcing employers to compete harder for workers and encouraging businesses to find efficiencies instead of simply adding staff.
Chirag Lala of the Center for Public Enterprise described productivity growth as a self-reinforcing trend. “Once we get started on a trend with consumption, incomes or productivity, it’s like inertia,” Lala said. “Breaking it takes a serious shock.”
The report also highlights leaner workforces as an underrated contributor to higher productivity. Finance and technology companies have undergone significant layoffs over the past two years, reducing payrolls while maintaining or even increasing output. Tech employment has declined for 18 consecutive months, while the finance sector has eliminated more than 100,000 jobs since reaching a peak in May 2025.
Employment in the U.S. oil and gas sector has fallen from roughly 200,000 workers in 2013 to about 115,000 today, even as production and profits per employee have increased. Meanwhile, Labor Department data show productivity growth in the professional and business services sector has exceeded 3% annually since 2021 despite declining employment.
Not everyone is convinced that artificial intelligence deserves credit for the recent productivity gains. Martha Gimbel, executive director of Yale Budget Lab, said productivity data can be difficult to interpret because it is adjusted for inflation, making short-term readings particularly volatile.
“There are several possibilities here, and the productivity data in particular is really hard to interpret,” Gimbel said. The Yale Budget Lab’s AI Labor Market Tracker has also found no clear relationship between AI adoption and employment changes so far.
Recent inflation caused by tariffs and higher oil prices during the conflict involving Iran may also temporarily distort productivity statistics, economists noted. If inflation continues easing, future reports could paint an even stronger picture of worker efficiency.
While businesses are becoming more productive, economists question whether workers will receive a proportional share of the gains. Former White House Council of Economic Advisers Chair Jared Bernstein said wage growth has failed to keep pace with productivity.
“If real compensation lags productivity growth, labor’s share falls,” Bernstein said, noting that productivity has grown roughly twice as fast as inflation-adjusted compensation over the past decade.
Mike Skordeles, head of U.S. economics at Truist, said newer digital tools already allow him to complete work that previously required junior staff. “Only a few years ago,” he said, “I would have had or hired three lower-level junior economists doing some of the charting and stuff that I can now do with the click of a button.”
