I’m not sure it’s the kind of print you’d expect in a “renaissance,” but US labor productivity beat expectations in the preliminary estimate for Q2, released on Thursday by the BLS.

The bureau’s advance read on productivity and costs doesn’t make for the most exciting reading, but it’s relevant in the context of Kevin Warsh’s implicit (it’s almost explicit) contention that for the purposes of policymaking, the Fed can assume tomorrow’s AI-assisted productivity gains today.

If that sounds like a man looking for excuses to dismiss rolling supply shocks while eschewing the rate hikes some of his colleagues believe are necessary to keep inflation expectations in check, that’s because it (he) is, in my opinion.

Anyway, labor productivity increased at a 1.4% seasonally adjusted annualized rate in Q2. That was more than double to small advance consensus expected. As a quick reminder: Productivity is just output per hour.

As the figure shows, there is a trend here. Since the launch of ChatGPT, this series has reflected efficiency gains every quarter but one.

Still — and I’ve said this before — recent gains don’t exactly leap off the page. These advances, consistent as they appear, aren’t suggestive of an epoch.

Anyway, a corollary of the productivity beat was an undershoot for unit labor costs, which rose 1.3% in Q2, the same as Q1. Unit labor costs are compensation deflated by productivity, which means hourly comp growth was 2.7%.

Note that real hourly compensation — i.e., inflation-adjusted pay — plunged at a 3.1% rate in Q2, when inflation surged as the war pushed up the cost of living.

As the figure shows, that was the sharpest drop since headline CPI briefly sported a nine-handle.

I’ll say the same thing I said following Q1’s productivity and cost report: Thursday’s data keeps the renaissance dream alive as it relates to the tech-enabled productivity boom thesis, but it’s far from conclusive.

I’d be totally remiss not to roll out the same Warsh soundbite — from last month’s congressional testimony — that every financial media outlet quoted after he spoke to lawmakers on July 15: “Everything technology touches ultimately gets cheaper.”

Maybe. But right now, shortages associated with the race to build AI infrastructure are pushing costs sharply higher. Just ask Tim Cook. And then there’s the thorny issue of human jobs.

Thursday’s Challenger release showed that although tech continues to lead in terms of hiring plans, the sector’s also responsible for more than one in three layoffs in 2026, with AI cited more often than not as the excuse for job cuts.

But Kevin has a dream. A dream that one day, sons of laid off tech-sector workers and Optimus robots will be able to sit down together at the table of brotherhood. And a dream that Generation Beta will live in a nation where they’ll be paid not on the merit of their work, nor based on the hours they put in, but by a government UBI check instead. Free at last, Free at last, Great God a-mighty, We are free at last.