It's a puzzle......................

 

That’s a major acceleration. 2.8% labor productivity growth is about equal to the best decades we’ve seen since World War 2. If that rate is sustained for a decade, or accelerates further, it’ll be pretty historic.

What’s driving the productivity boom? It’s tempting to conclude that AI is making white-collar workers more productive, but Ernie Tedeschi points out that the biggest swing has been in manufacturing productivity. For a long time, manufacturing productivity was basically flatlining in America; now it’s suddenly growing again.

Tedeschi argues that this is also probably AI-driven, but it’s not about people using ChatGPT and Claude Code at work — it’s about the fact that a ton of data centers are being built, and data centers are very valuable:

If you look at data centers’ contribution to growth itself, it looks pretty small, but this masks the value of the computers contained within the data centers. Together, the creation of data centers and computing equipment have been contributing about as much to GDP growth as they were during the dot-com boom:

-Noah Smith, as cut-and-pasted from here