US productivity grew 2.1% in the AI boom — only a quarter to half of dot-com peak
emilygsands · x · 2026-11-07
Economist Ernie Tedeschi — called by Noah Smith the most circumspect analyst of First AI Boom macroeconomics — shares key data and judgments:
- US business sector productivity grew 2.1% over the year ending 2026 Q3, running +0.5–1pp above the 1–1.5% trend. Good news.
- At the dot-com peak (1999–2000), productivity ran +2pp above trend annually, with the premium fully faded by 2005 — today's AI effect is roughly 1/4 to 1/2 of that peak.
- Quarter-to-quarter productivity numbers are too noisy to weight heavily.
- Notably, productivity growth was stronger in 2023, when AI capabilities were far weaker but AI capex was accelerating — which should tell us something.
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