Opinion: Investors are waiting on Friday’s jobs numbers. They should be more worried about this other labor report.

Outside the BoxAI-driven productivity gains are hindering the Fed’s effort to juice the labor market

Last Updated: Jan. 7, 2026 at 5:00 p.m. ET
First Published: Jan. 7, 2026 at 10:24 a.m. ET

The artificial intelligence-led boom in U.S. productivity is making it harder for the Federal Reserve to breathe life into a languishing labor market.

Fresh economic data slated for release Thursday is expected to show that U.S. nonfarm productivity — measured by dividing output by the number of hours worked — rose at a 4.74% annualized rate in the third quarter of 2025, up from the previously reported 3.29% increase. If those estimates hold, it will be the highest level since the third quarter of 2020, when economic reopening from the pandemic sent workers rushing back and boosted productivity to 6.58%.