Bot the difference: AI’s absence in economic data

The Economist. Hello and welcome to the intelligence from The Economist. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. A horrific attack in Western Nigeria earlier this month is just one sign of a troubling change. Jihadist groups are splitting, leading to more violence between them and spreading ever closer to the country's urban centers, threatening violence for all. And nobody ever gave Virginia Oliver any hassle for being a woman running a lobster boat. No one dared. We look back on a career spent working Maine's waters for nearly a century. But first, Your favorite economist and mine, John Maynard Keynes made one wild assertion back in 1930 in his essay, economic possibilities for our grandchildren. He does a potted history of humanity pointing out the incredible pace closer to his time of what he keeps calling technical inventions and technical improvements. They'd had huge impacts on workers productivity. He concludes that by 2030, we'd all be working fifteen hour weeks. I don't know about you, but four years out and that still looks unlikely. People love pointing out this folly of the great man, but let's take a broader lesson. Big technical improvements like, say, artificial intelligence take maybe a little longer than you might think to have big economic outcomes. AI capabilities are certainly improving very fast, but the effect of AI on the economy, not so much. Alex Domasch is our economics correspondent. AI may well lead to a productivity boom one day, but that productivity boom is not here yet. And you say that because you've been digging into the economic data. What are they saying? Looking at America, there has been a sort of puzzle in the macroeconomic data, especially over the last year. So throughout most of 2025, you had on the one hand a booming economy. You had real GDP growing quite rapidly for most of the year. And at the same time, you had a slowdown in hiring. You had pretty sluggish employment growth. And especially in the second and third quarters in America, real GDP was growing quite rapidly. In the fourth quarter, we did get a real GDP print that was lower than expected. It came in at 1.4%, which sort of tempered the narrative of this big GDP boost with slow employment. But still throughout 2025, you did have real GDP growing at 2.2% while you had employment growing at an average of 15,000 jobs per month, which came out to about 0.1% employment growth through the year. So the fact that there was this big gap between real GDP growth and slow employment growth, it usually would imply that productivity growth is quite high and that workers are producing more with less hours worked. You say the gap between those numbers would normally be attributed to a growth in productivity per worker in a way that suggests that's not the explanation here. Correct. So 2025, of course, …