Productivity growth, as seen in 1996

The recent AI boom has renewed debate about how official statistics capture changes in productivity growth and how any lags or limitations might impact monetary policy. For example, in the 1990s, some believed that low measures of productivity weren’t capturing the true benefits from new technology.

Back in 1996

Federal Reserve Chair Alan Greenspan argued in 1996 that the productivity gains associated with the information and communications technology boom were not yet visible in the official data. That judgment helped support his case for delaying preemptive interest-rate increases.

Shortly afterward, the 1999 comprehensive revision of the National Income and Product Accounts began treating software expenditures as capital investment. Together with other statistical changes, this revision raised estimates of the productivity growth that had occurred during the 1990s, bringing the official data closer in line with the acceleration in productivity that Greenspan believed had been under way.

The data, as seen in 1996, 2000, and 2026

Our ALFRED graph above compares three vintages of labor productivity growth data: The blue bars reflect early data available in September 1996. The green bars reflect the revised data available in February 2000, which incorporate the 1999 NIPA revision. The orange bars reflect the most-current data available at the time of this writing, as of June 2026.

• As of September 1996, the data indicated that labor productivity had grown by an average of just 0.89% between 1989 and 1995.
• By February 2000, average labor productivity growth for that same time period had been raised to 1.40%.
• As of June 2026, after more revisions, it stands at 1.51%.

This comparison shows how weak measures of productivity growth appeared in real time and how subsequent revisions substantially altered the historical picture.

How this graph was created: Search ALFRED for “Nonfarm Business Sector: Labor Productivity (Output per Hour) for All Workers” and select the series with ID OPHNFB. Open “Edit Graph” and add the series three times. Set the as-of dates to September 10, 1996; February 8, 2000; and June 4, 2026. For each series, change the units to “Percent Change from Year Ago,” set the frequency to “Annual,” and use “Average” as the aggregation method. Adjust the observation period to begin in 1989 and end in 1995.

Suggested by Hannah Rubinton.