Accessible Version
Accessible Version
University of California, San Diego
La Jolla, California
November 13, 2026
New Technology, Old Questions:
Productivity Puzzles and the Macroeconomy
Philip N. Jefferson
Vice Chair
Board of Governors of the Federal Reserve System
The views expressed here are my own and are not necessarily those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee.
Road Map of Talk
- Productivity Puzzles: Then and Now
- Paths of Adoption
- Implications for the Macroeconomy
- Economic Outlook
- Conclusion
Figure 1: U.S. Business Investment in Computers and Household Spending on Computers and Phones
Index numbers, 2017=100, Annual
| Date | Business Computers | Household Computers | Household Phones |
|---|---|---|---|
| 1980-12-31 | 0.146 | 0 | 0.46 |
| 1981-12-31 | 0.227 | 0.001 | 0.616 |
| 1982-12-31 | 0.275 | 0.003 | 0.668 |
| 1983-12-31 | 0.418 | 0.01 | 0.62 |
| 1984-12-31 | 0.684 | 0.012 | 0.583 |
| 1985-12-31 | 0.859 | 0.012 | 0.527 |
| 1986-12-31 | 0.987 | 0.029 | 0.502 |
| 1987-12-31 | 1.241 | 0.038 | 0.485 |
| 1988-12-31 | 1.418 | 0.054 | 0.498 |
| 1989-12-31 | 1.724 | 0.058 | 0.53 |
| 1990-12-31 | 1.704 | 0.073 | 0.537 |
| 1991-12-31 | 1.85 | 0.114 | 0.537 |
| 1992-12-31 | 2.508 | 0.151 | 0.556 |
| 1993-12-31 | 3.214 | 0.251 | 0.604 |
| 1994-12-31 | 3.996 | 0.375 | 0.678 |
| 1995-12-31 | 6.032 | 0.582 | 0.734 |
| 1996-12-31 | 8.717 | 0.998 | 0.782 |
| 1997-12-31 | 12.727 | 1.703 | 0.822 |
| 1998-12-31 | 18.411 | 2.796 | 0.947 |
| 1999-12-31 | 26.099 | 4.368 | 1.229 |
| 2000-12-31 | 31.577 | 6.019 | 1.562 |
| 2001-12-31 | 32.211 | 7.953 | 1.842 |
| 2002-12-31 | 33.605 | 10.991 | 2.256 |
| 2003-12-31 | 37.682 | 14.473 | 3.267 |
| 2004-12-31 | 42.763 | 18.082 | 4.331 |
| 2005-12-31 | 48.435 | 22.95 | 5.26 |
| 2006-12-31 | 60.623 | 28.707 | 7.68 |
| 2007-12-31 | 69.246 | 33.874 | 10.572 |
| 2008-12-31 | 74.41 | 38.01 | 13.181 |
| 2009-12-31 | 75.452 | 42.004 | 16.547 |
| 2010-12-31 | 87.234 | 48.27 | 20.867 |
| 2011-12-31 | 86.759 | 56.832 | 23.697 |
| 2012-12-31 | 95.258 | 65.447 | 31.308 |
| 2013-12-31 | 94.703 | 74.619 | 38.995 |
| 2014-12-31 | 94.467 | 80.267 | 56.222 |
| 2015-12-31 | 94.565 | 83.771 | 72.145 |
| 2016-12-31 | 94.05 | 90.163 | 84.405 |
| 2017-12-31 | 100 | 100 | 100 |
| 2018-12-31 | 113.145 | 114.327 | 110.613 |
| 2019-12-31 | 114.375 | 126.162 | 128.182 |
| 2020-12-31 | 124.392 | 152.435 | 135.285 |
| 2021-12-31 | 143.019 | 175.904 | 190.937 |
| 2022-12-31 | 150.664 | 188.696 | 236.332 |
| 2023-12-31 | 138.382 | 214.238 | 281.493 |
| 2024-12-31 | 168.065 | 237.275 | 323.255 |
| 2025-12-31 | 257.424 | 257.662 | 362.461 |
Note: Vertical dotted line represents Solow's remark in 1987.
Source: Bureau of Economic Analysis
Figure 2: Worker AI Adoption
Percent share, quarterly
| Survey date | Use | Use every day |
|---|---|---|
| 08/24 | 33.27 | 12.10 |
| 11/24 | 31.01 | 9.09 |
| 02/25 | 32.75 | 10.70 |
| 05/25 | 35.08 | 11.15 |
| 08/25 | 37.36 | 12.56 |
| 11/25 | 40.65 | 12.16 |
| 02/26 | 42.84 | 12.24 |
| 05/26 | 45.20 | 13.69 |
| 08/26 | 40.55 | 11.47 |
Source: The Harvard Project on Workforce.
Figure 3: AI Adoption, by Sector
Percent of businesses using AI
| Sector name | AI adoption |
|---|---|
| Natural Res. & Mining | 11.38 |
| Construction | 16.10 |
| Manufacturing | 22.90 |
| Trade, Trans. & Utilities | 18.28 |
| Information | 46.40 |
| Financial Activities | 34.83 |
| Professional & Bus. Services | 37.10 |
| Edu. & Health Services | 28.21 |
| Leisure & Hospitality | 12.57 |
| Other Services | 14.60 |
| Total | 24.60 |
Note: Establishment weighted adoption rates as of early October 2026. Sector adoption rates derived from more detailed industry information weighted by establishment counts. Firms recorded as "multiple NAICS" are excluded.
Source: U.S. Census Bureau, Statistics of U.S. Business (establishments) and Business Trend Outlook Survey (AI adoption).
Figure 4: Real Gross Domestic Product
Percent, annual rate
| Date | GDP Growth |
|---|---|
| 2024:H1 | 2.5 |
| 2024:H2 | 2.8 |
| 2025:H1 | 2.1 |
| 2025:H2 | 2 |
| 2026:H1 | 2.4 |
| 2026:Q3 | 3.37 |
Note: Percent change is from the preceding period. Half-year GDP values represent Q4:Q2 and Q2:Q4 comparisons. The 2026:Q3 bar is the annualized quarter-over-quarter change in real GDP, from 2026:Q2 to 2026:Q3.
Source: U.S. Bureau of Economic Analysis, Real Gross Domestic Product, retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 5: Unemployment Rate
Percent, monthly
| Date | Unemployment rate |
|---|---|
| 2024-01-01 | 3.7 |
| 2024-02-01 | 3.9 |
| 2024-03-01 | 3.9 |
| 2024-04-01 | 3.9 |
| 2024-05-01 | 3.9 |
| 2024-06-01 | 4.1 |
| 2024-07-01 | 4.2 |
| 2024-08-01 | 4.2 |
| 2024-09-01 | 4.1 |
| 2024-10-01 | 4.1 |
| 2024-11-01 | 4.2 |
| 2024-12-01 | 4.1 |
| 2025-01-01 | 4 |
| 2025-02-01 | 4.2 |
| 2025-03-01 | 4.2 |
| 2025-04-01 | 4.2 |
| 2025-05-01 | 4.3 |
| 2025-06-01 | 4.1 |
| 2025-07-01 | 4.3 |
| 2025-08-01 | 4.3 |
| 2025-09-01 | 4.4 |
| 2025-11-01 | 4.5 |
| 2025-12-01 | 4.4 |
| 2026-01-01 | 4.3 |
| 2026-02-01 | 4.4 |
| 2026-03-01 | 4.3 |
| 2026-04-01 | 4.3 |
| 2026-05-01 | 4.3 |
| 2026-06-01 | 4.2 |
| 2026-07-01 | 4.1 |
| 2026-08-01 | 4.1 |
| 2026-09-01 | 4.2 |
| 2026-10-01 | 4.1 |
Note: Data for October 2025 are unavailable.
Source: U.S. Bureau of Labor Statistics, Unemployment Rate, retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 6: 12-Month PCE and Core PCE Inflation
12-month percent change, monthly
| Date | PCE Inflation | Core PCE Inflation |
|---|---|---|
| 2024-01-01 | 2.75 | 3.22 |
| 2024-02-01 | 2.81 | 3.18 |
| 2024-03-01 | 2.95 | 3.15 |
| 2024-04-01 | 2.84 | 3.02 |
| 2024-05-01 | 2.70 | 2.81 |
| 2024-06-01 | 2.57 | 2.78 |
| 2024-07-01 | 2.60 | 2.81 |
| 2024-08-01 | 2.44 | 2.90 |
| 2024-09-01 | 2.26 | 2.84 |
| 2024-10-01 | 2.41 | 2.90 |
| 2024-11-01 | 2.49 | 2.87 |
| 2024-12-01 | 2.65 | 2.90 |
| 2025-01-01 | 2.63 | 2.81 |
| 2025-02-01 | 2.57 | 2.82 |
| 2025-03-01 | 2.26 | 2.56 |
| 2025-04-01 | 2.33 | 2.68 |
| 2025-05-01 | 2.46 | 2.79 |
| 2025-06-01 | 2.61 | 2.83 |
| 2025-07-01 | 2.59 | 2.84 |
| 2025-08-01 | 2.69 | 2.85 |
| 2025-09-01 | 2.78 | 2.82 |
| 2025-10-01 | 2.66 | 2.70 |
| 2025-11-01 | 2.71 | 2.72 |
| 2025-12-01 | 2.78 | 2.87 |
| 2026-01-01 | 2.73 | 2.94 |
| 2026-02-01 | 2.80 | 2.96 |
| 2026-03-01 | 3.37 | 3.11 |
| 2026-04-01 | 3.57 | 3.08 |
| 2026-05-01 | 3.82 | 3.16 |
| 2026-06-01 | 3.45 | 3.04 |
| 2026-07-01 | 3.37 | 3.00 |
| 2026-08-01 | 3.44 | 3.03 |
| 2026-09-01 | 3.65 | 3.12 |
Note: PCE inflation is the change in the personal consumption expenditures price index, and core PCE inflation is the change in the PCE price index excluding food and energy. PCE and core PCE are 12-month inflation percentages calculated using seasonally adjusted annual rates.
Source: U.S. Bureau of Economic Analysis, Personal Consumption Expenditures: Chain-Type Price Index and Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index), retrieved from FRED, Federal Reserve Bank of St. Louis.
Figure 7: Federal Funds Rate
Percent, monthly
| Date | Fed Funds Monthly Average Rate |
|---|---|
| 2024-01-01 | 5.33 |
| 2024-02-01 | 5.33 |
| 2024-03-01 | 5.33 |
| 2024-04-01 | 5.33 |
| 2024-05-01 | 5.33 |
| 2024-06-01 | 5.33 |
| 2024-07-01 | 5.33 |
| 2024-08-01 | 5.33 |
| 2024-09-01 | 5.13 |
| 2024-10-01 | 4.83 |
| 2024-11-01 | 4.65 |
| 2024-12-01 | 4.48 |
| 2025-01-01 | 4.33 |
| 2025-02-01 | 4.33 |
| 2025-03-01 | 4.33 |
| 2025-04-01 | 4.33 |
| 2025-05-01 | 4.33 |
| 2025-06-01 | 4.33 |
| 2025-07-01 | 4.33 |
| 2025-08-01 | 4.33 |
| 2025-09-01 | 4.23 |
| 2025-10-01 | 4.08 |
| 2025-11-01 | 3.88 |
| 2025-12-01 | 3.73 |
| 2026-01-01 | 3.64 |
| 2026-02-01 | 3.64 |
| 2026-03-01 | 3.64 |
| 2026-04-01 | 3.64 |
| 2026-05-01 | 3.63 |
| 2026-06-01 | 3.63 |
| 2026-07-01 | 3.63 |
| 2026-08-01 | 3.63 |
| 2026-09-01 | 3.74 |
| 2025-10-01 | 3.88 |
| 2025-11-01 | 3.88 |
Source: Federal Reserve Bank of New York, https://www.newyorkfed.org/markets/reference-rates/effr.