🔍 Read the full analysis: Understanding The US Growth And Hours Gap In The Age Of AI on ThorstenMeyerAI.com
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TL;DR
US business-sector output rose 10.0% from the fourth quarter of 2022 to the second quarter of 2026, while hours worked rose 0.9%, according to figures cited from BLS indexes. The gap coincides with faster productivity growth and uneven hiring, but the available data do not show that AI caused it.
US business output has risen much faster than hours worked since late 2022, a gap that has intensified debate about whether artificial intelligence is changing employment. Data cited by Thorsten Meyer from the Bureau of Labor Statistics (BLS), Bureau of Economic Analysis (BEA) and other agencies show stronger productivity alongside sluggish hiring and pressure on workers’ share of income, but do not establish AI as the cause.
Meyer’s November 1 report says that from the fourth quarter of 2022 to the second quarter of 2026, business-sector output increased 10.0% while hours worked increased 0.9%, based on his calculations from BLS indexes. The BLS measure covers nonfarm businesses, excluding government, nonprofits and households. Separately, the agency reported that productivity in that sector grew 2.2% over the year to the second quarter of 2026, as output rose 2.5% and hours worked 0.2%.
The report also cites the BEA’s October 29 advance estimate that real GDP grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second. Consumer spending, investment and government spending contributed to the increase. These GDP figures cover the overall economy and are not the same measure as BLS nonfarm-business productivity.
Employment gains were uneven. In the 12 months to September, payrolls grew by 496,000, while health care and social assistance added 520,000 jobs, according to the figures in Meyer’s report. Information industries lost 120,000 jobs and remained 12% below their November 2022 peak. The report says real private-sector wages fell 0.6% over the year to September and the labor share of business output reached 52.8% in the second quarter, its lowest level in the series that began in 1947.
Infographic 01 · More output, same hours
Ten percent more output, almost the same hours
The US business sector produces much more than three years ago with almost no extra work. The new jobs are mostly in health care.
The last 12 months
Nonfarm business sector, Q2 2025 to Q2 2026
- Outputreal, value added+2.5%
- Productivityoutput per hour+2.2%
- Hours workedall workers+0.2%
Where the jobs went
Payroll jobs, change over 12 months to Sep 2026 (preliminary)
Since Q4 2022: output +10.0%, hours +0.9%, productivity +9.1% (my arithmetic from the BLS indexes). Hiring rate in Aug 2026: 3.3% of jobs (2019 average 3.9%); layoff rate 1.0% (2019: 1.2%). Correlation, not proof of cause.
Sources: BLS, Productivity and Costs Q2 2026 (3 Sep 2026) · BLS, Employment Situation Sep 2026 · BLS, JOLTS Aug 2026.
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Productivity Gains, Uneven Pay and Hiring
The figures matter because they describe an economy producing more without a similar increase in recorded work hours. If productivity growth persists, businesses may be able to expand output without adding workers at the same pace. That could support economic growth, but the employment and wage figures suggest that gains are not reaching all workers evenly.
The report points to 4.2% overall unemployment, compared with 8.0% for people aged 20 to 24 and 7.0% for Black workers. Those group rates are higher than the report’s cited April 2023 figures of 5.5% and 4.8%, respectively. The figures do not by themselves explain why unemployment differs, but they highlight how younger people and some groups may face a tougher entry into a labor market where hiring is slow.
For companies, the data offer a reason to examine how output, staffing and wages are changing. For workers, the central issue is whether productivity gains translate into stronger pay, job opportunities or both. The reported fall in labor share and real wages makes that distribution question more immediate, while leaving its causes unresolved.
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What the Productivity Data Measure
Productivity is output divided by hours worked. The BLS nonfarm business series tracks private businesses outside farming; it does not cover every part of the economy. GDP, by contrast, measures total economic activity, so the report’s GDP growth rate and business-sector productivity figures should not be treated as interchangeable.
The comparison begins in late 2022, around the public launch of ChatGPT on November 30, a date often used to mark the start of the generative AI era. Meyer reports that productivity grew at an average annual rate of 2.1% from the end of 2019, compared with 1.5% from 2007 to 2019. That longer-term comparison indicates faster productivity growth in the more recent period, but it does not identify what drove the change.
The report situates its question alongside recent coverage: a Financial Times opinion column on October 31 asked whether labor-market patterns were early evidence of AI’s impact, while a Wall Street Journal headline described economic growth that was not broadly shared. Meyer says he could not read either article in full and bases his analysis on government data instead.
“Productivity grew 2.2% from the second quarter of 2025 to the second quarter of 2026.”
— Bureau of Labor Statistics, as cited in the report
AI’s Role Is Not Established
The data show that output and productivity rose while hours and hiring grew more slowly, but they cannot show that AI caused the difference. Meyer cites Census Bureau data from early October indicating that about one in four US businesses reported using AI. That measure does not establish how extensively businesses use AI, when they adopted it, or whether adoption changed staffing or output.
The report also notes that technology jobs began declining before generative AI was widely used in business. Other explanations for the output-hours gap may fit the same pattern, and the source material does not quantify their relative contribution. It also remains unclear whether the recent productivity pace will continue, how broadly it will benefit workers, or whether the reported wage and labor-share declines will persist.
Some figures are measured over different periods and cover different populations: GDP growth is a quarterly annualized rate, while the cited productivity figures compare year-over-year periods or index levels since late 2022. Those distinctions limit direct comparisons and any claim about a single cause.
Future Data May Clarify the Pattern
The next BLS productivity releases and employment reports will show whether the gap between output and hours continues, narrows or widens. Updated BEA GDP estimates may also revise the third-quarter growth figures. None of those releases alone can prove AI’s effect, but together they can show whether the current pattern is sustained across sectors and time.
More evidence would be needed to link AI adoption to specific changes in productivity, hiring, hours or pay, including data on which businesses use AI and how their workforces change after adoption. Until then, the supported conclusion is narrower: US productivity has strengthened and output has outpaced hours worked, while the cause and distribution of those gains remain open questions.
Key Questions
How much did US business output and hours worked change?
From the fourth quarter of 2022 to the second quarter of 2026, business-sector output rose 10.0% and hours worked rose 0.9%, based on the report’s calculations from BLS indexes.
Does the data prove AI is reducing jobs?
No. The figures show productivity growth and uneven employment patterns, but they do not establish AI as the cause. The report says about one in four US businesses reported using AI in early October, without specifying the effect on staffing.
What happened to US GDP in the third quarter of 2026?
The BEA’s advance estimate, cited in the report, put real GDP growth at a 3.4% annual rate in the third quarter, compared with 2.2% in the second quarter.
Where did most of the reported payroll growth occur?
In the 12 months to September, payrolls grew by 496,000, while health care and social assistance added 520,000 jobs. Information industries lost 120,000 jobs over the same period, according to the report.
What remains unknown about the productivity gap?
It is not clear how much AI, if any, accounts for the gap between output and hours worked, whether the recent productivity pace will last, or how the gains will affect wages and job opportunities.
Source: ThorstenMeyerAI.com
