"The curve refers to the idea that general-purpose technologies like AI don't produce immediate benefits. Instead, massive investment comes first, obscuring early gains. It's only after this initial dip that productivity really takes off, resulting in the J shape. But for some, it's not clear yet that the transformation is happening."
"Apollo Chief Economist Torsten Slok quipped that " AI is everywhere except in the incoming macroeconomic data," recalling Robert Solow's famous quote about the PC revolution. Slok added that employment, productivity and inflation stats are still not showing signs of the new technology. Meanwhile, profit margins and earnings forecasts for S&P 500 companies outside of the "Magnificent 7" also lack evidence of AI at work."
"Wednesday's report revised the reading on 2025 job gains to just 181,000, down from an initial print of 584,000 and from 2024's gain of 1.46 million. Given that the economy continued to expand at a healthy pace while adding so few workers last year, with fourth-quarter GDP tracking up 3.7%, that suggests a surge in productivity. Brynjolfsson said his own analysis suggests U.S. productivity jumped roughly 2.7% in 2025-nearly double the 1.4% annual average seen over the past decade."
The J-curve concept holds that general-purpose technologies such as AI require large upfront investment that initially obscures measurable gains, followed by a later surge in productivity. Current macro indicators provide mixed signals: employment, productivity and inflation statistics have not uniformly reflected AI-driven improvements, and profit margins outside the largest tech firms lack clear AI effects. Revised 2025 jobs data—showing much smaller reported job gains alongside robust GDP growth—imply a sharp rise in labor productivity, with estimates near a 2.7% increase for 2025. The pattern could mark a transition from an investment phase to a harvest phase of AI adoption.
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