US labor productivity has been growing at roughly 2.5% annualized over the past year, well above the 1.6% average of the prior two decades. But according to a new analysis from Stripe economist Ernie Tedeschi, artificial intelligence has almost nothing to do with it.
The culprit behind the productivity surge is far less sexy: companies are simply getting better at using the capital they already have.
The gap between AI hype and macro reality
At the individual task level, AI looks genuinely impressive. Studies have shown a 14% productivity bump for customer service agents using AI tools, and writing tasks getting done 40% faster.
But zoom out to the economy-wide view and the picture changes dramatically. Total factor productivity, the metric that captures genuine technological progress rather than just throwing more capital and labor at problems, has been essentially flat. The San Francisco Fed’s estimates show TFP growth hovering near zero, while the Bureau of Labor Statistics reported just 0.8% growth in 2025.
