It is too early to credit artificial intelligence for the resurrection. Productivity picked up in the early 2020s, whereas large language models have come into real commercial use only in the past year or so. If previous technological revolutions are anything to go by, the AI age will take at least a few years to show up in productivity statistics. Its main macroeconomically discernible impact so far has been on business investment, particularly in data centres. To divine the real causes of the phenomenon, The Economist started by poring over official data on productivity growth by sector since 2000 from America’s Bureau of Labour Statistics. Between 2019 and 2024 the “information” industry—which covers areas from software and telecoms to publishing and film-making—came top with an annual rate of around 6%. That was no higher than the annual average in 2000-19. Nor is America’s recent uptick the consequence of this particularly efficient industry accounting for a bigger slice of the economy: in the past six years the sector’s share of total American output has hovered between 5.3% and 5.5%.

Instead, some of the biggest jumps in productivity growth have come in professional services and management (see chart 4). These make up a tenth of the American economy, up a little from 2019. They are the sorts of businesses that do not produce new technology, but are keen users of it. In the past few years America’s suits have at last taken full advantage of the signature innovations of the 2010s: smartphones, cloud computing, videoconferencing and the like. Productivity growth also sped up in oil and gas. The shale-fracking revolution of the 2010s turned America from a net energy importer to an exporter. In 2023 it sold half as much energy abroad, net of imports, as Saudi Arabia. Since then, construction of new liquefaction plants for natural gas has allowed America to send the fuel to Europe and Asia, where it fetches higher prices than at home.

The indirect effects of America’s energy boom may be yet more consequential. Electricity is an input into just about everything and Americans pay half as much for it, on average, as Europeans and a third less than the Japanese. When it is inexpensive and abundant, workers and machinery can keep producing as much as possible without worrying too much about energy use. This helps explain why some energy-intensive businesses like mining and chemicals have not collapsed as they have in Europe. Another factor behind the spurt in productivity growth is both fuzzier and more fundamental. The American economy remains unusually flexible, dynamic and innovative by rich-world standards. This makes it particularly adaptable, especially in times of crisis. Indeed, the start of the latest productivity boom coincided with the nigh-biblical pestilence of the covid- 19 pandemic—and in contrast to the previous big upswing over two decades ago, other rich countries have not experienced the same miraculous revival this time. Unlike much of Europe, for instance, America largely opted to hand out pandemic assistance in cash rather than pursuing complex schemes that tied workers to their existing jobs. When lockdown lay-offs began to be

unwound, people were likelier to find new work in more efficient businesses —because these were the firms best placed to restart hiring. The American economy is also taking more recent shocks in its stride. From the start of 2025 to March 2026, productivity growth was fairly solid— between 1.2% (per American worker including farmers) and 2.1% (per hour for non-farm business) at an annual rate (see chart 2). This was despite Donald Trump’s best efforts to the contrary in the form of anti-growth tariffs, mass deportations and attacks on institutions like the Fed. It is likely to survive the president’s strategically misguided war in Iran. And the AI age will probably show up in those productivity statistics sooner rather than later—even if the models never attain godlike powers. Expect the productivity miracle to continue.■ For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. This article was downloaded by zlibrary from https://www.economist.com//finance-and-economics/2026/05/11/america-is- experiencing-a-productivity-miracle

Finance & economics | Docks, stocks and barrels How the world has avoided an oil catastrophe so far The great commodity-market mystery is deepening May 14th 2026 Ten weeks into the Iran war, the mystery is deepening. Every day the Strait of Hormuz remains closed, nearly 14m barrels of oil—14% of global output —are lost. At least 2bn barrels will probably disappear from this year’s total even if the strait reopens today. Yet Brent crude, at $106 a barrel, fetches much less than the $129 it hit in 2022, after Russia invaded Ukraine, and nowhere near the $150-200 analysts predicted if the Iran war dragged on. One reason is oil traders’ perpetual optimism about a diplomatic breakthrough. “Front-month” Brent—the nearest futures contract and global benchmark—locks in a price for oil to be loaded onto tankers in roughly two months’ time. Whenever Donald Trump hints at an imminent deal, markets

put off pricing in further disruption. But lately even spot prices have calmed: “dated” Brent, which tracks crude loading in the coming days, traded at $25 above front-month futures in early April; now the gap is just a few dollars (see chart 1). Two forces explain why the panic has faded. First, non-Gulf producers have turbocharged exports. Net of imports, in the four weeks to May 10th Canada shipped 400,000 more barrels per day (b/d) of crude and refined products than a year earlier. Venezuela and Norway each added 200,000 b/d; Brazil, 100,000 b/d. Most remarkably, America put on 3.8m b/d, according to Vortexa, a ship-tracker; at nearly 9m b/d, its net petroleum exports in those four weeks were the highest ever (see chart 2). America’s export machine took a few weeks to crank up. New contracts had to be signed; extra barrels produced or drawn from reserves; pipelines booked; the right oil blended. In March freight rates from the Atlantic to Asia and Europe jumped to lure more tankers to those routes. To compensate buyers, the discount on West Texas Intermediate, America’s flagship crude, relative to Brent and Dubai (the Asian benchmark) broke records.

The tide of non-Gulf barrels narrowed the supply gap to roughly 8m b/d. Enter the second force: in the same four weeks big oil-buying regions imported 11m b/d less petroleum than a year before. China’s purchases alone dropped by 6.6m b/d (see chart 3). The country’s refiners have even resold some cargoes they had pledged to buy from west Africa and beyond to other Asian buyers. The fall in imports is not good news. Some of it reflects demand destruction. Crude shortages have forced refiners in Asia and Europe to cut throughput by nearly 4m b/d. The loss of 4.4m b/d of refined products from the Gulf has pushed prices of diesel, gasoline and jet-fuel up by 60-120%. Squeezed consumers have cut back. Many petrochemical plants, starved of naphtha, a crucial plastics feedstock, are running below capacity.

Yet most estimates of demand destruction fall below 5m b/d, suggesting much of the drop in imports reflects caution not privation. Some buyers, too, may believe the strait will reopen soon and are deferring purchases until prices fall. The surprising result is a mini-glut of crude. That is keeping the Brent price down. How long can it last? Satellite imagery suggests China’s onshore stocks have barely budged, implying refineries have slashed throughput. But crude imports have collapsed so far that this cannot be the whole story. Martijn Rats of Morgan Stanley, a bank, suspects crude once held in underground caverns has moved above ground, covering the shortfall. Such drawdowns are likely to accelerate. Soon Chinese refineries’ maintenance season will end. They may increase exports, now the government has loosened a ban imposed in March. China has perhaps 1.2bn barrels of crude in storage: enough to keep imports depressed for much of 2026. But “strategically, they don’t want to draw down everything this year,” says Neil Crosby of Sparta Commodities, a data firm. That means China importing more, and the rest of the world less.

America may present a bigger problem. Its exports are now likelier to fall than rise. As in China, refiners’ maintenance season will soon end, and more than 500,000 b/d now earmarked for export could be redirected, estimates Kpler, another data firm. More worrying, motor-fuel stocks are plummeting at record speed (see chart 4). If this continues, even a modest rise in crude prices could push petrol to $5 a gallon—a threshold last breached in 2022, when it hurt both drivers and Joe Biden’s approval ratings. Mr Trump’s administration is therefore mulling a ban on refined-product export. When Brent hovered around $100, one insider put the chances of such a ban at 35%. They will be higher now, and could cross 50% if pump prices jump by Memorial Day on May 25th, several sources say. That would roil energy markets the world over. Ban or no ban, oil stocks will keep falling everywhere. America and China have bought the world time. It still faces a reckoning if Hormuz stays shut.■ For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. This article was downloaded by zlibrary from https://www.economist.com//finance-and-economics/2026/05/12/how-the-world-has- avoided-an-oil-catastrophe-so-far

Finance & economics | Buttonwood Index rebalancing is now the biggest event in markets But profiting from it is another matter May 14th 2026 What do the Indonesian stockmarket, South Korean government bonds and Robinhood, an online broker, have in common? Not much, you might think. But over the past year investors in all three have quivered before the same phenomenon: the awesome power of financial indices. The largest of these now exert a tidal pull on markets. As of 2025, around $36trn-worth of capital was in passive investment funds. These automatically track decisions by MSCI, FTSE Russell, S&P Global and the like to determine what to buy, and how much. Many trillions more are supposedly invested actively, but by “closet index-huggers”—timid managers who fear straying too far from their benchmarks.