AI-driven productivity improvements are poised to significantly boost GDP growth in the coming years, although short-term increases in frictional unemployment may occur during AI adoption.

Over the past five years, labor productivity outside the farm sector has grown around 2% annually, driven mainly by technological advancements and innovation in sectors like tech, scientific research, engineering, and consulting.

Since 2019, the US economy's potential growth rate has been estimated at approximately 2.4%, slightly below recent years but still above pre-pandemic levels, supported by increased labor productivity and immigration.

Risks to these forecasts include the possibility of faster-than-expected AI adoption or breakthroughs in artificial general intelligence, which could dramatically accelerate productivity, as well as slower technological progress or population growth.

The recent acceleration in productivity is partly due to technological innovation, with AI likely playing a key role in enhancing productivity in high-value sectors, though not all gains are solely attributable to AI.

Goldman Sachs projects that US potential GDP growth will average about 2.1% from 2025 to 2029, increasing to around 2.3% in the early 2030s, driven by productivity gains and a slowdown in labor force growth.

Changes in immigration policies have contributed to labor force growth, but recent tighter restrictions are expected to reduce this contribution from about 0.8% to roughly 0.3% annually, impacting potential GDP expansion.