https://apnews.com/article/inflation-pay-economy-productivity-workers-technology-prices-c1e0163d51b430fcb18f0c80e32b2d81AP News article: "Robots and happy workers: Productivity surge helps explain US economy’s surprising resilience"
TL;DR is basically that companies are investing very heavily in automation, software, and robotics in the aftermath of the pandemic, and since late-2022, worker productivity has started surging to levels last seen 25 years ago when computers were adopted
en masse:
The productivity boom marks a sharp shift from the pre-pandemic years, when annual productivity growth averaged around a tepid 1.5%, according RSM’s calculations. Everything changed as the economy rocketed out of the 2020 pandemic recession with unexpected vigor, and businesses struggled to re-hire the many workers they had shed.
Desperate, many companies turned to automation. Investment in equipment and in research and development and other forms of intellectual property accelerated. The efficiency payoff began to arrive almost a year ago. Labor productivity rose at a 3.6% annual pace from last April through June, 4.9% from July through September and 3.2% from October through December.
For comparison, productivity growth between 1995 and 2000 was consistently in a band between approximately 2.5% to 4.5%, with some individual quarters in 1997 and 1999 even breaking the 6% mark.
And generative AI is only just starting to really be adopted by companies
en masse in a similar way.
There is also evidence that the tight labor market is also encouraging productivity by enabling workers to take risks and take the jump to jobs they find more fulfilling and can be more motivated about, in addition to productivity benefits from remote working and increased self-employment.
Productivity growth was quite strongly negative in 2022 as companies hoarded labor and new hires got up and running, but it seems that has reversed. Let's hope this holds going forward.
