Official government data gives only a fuzzy reading of what is driving economy-wide productivity improvements — but conversations with top executives help shed light on what's really going on.

Why it matters: One of the great questions for the economy in 2024 is whether a 2023 productivity surge will continue — allowing for a happy pairing of strong growth and lower inflation.

• Our conversations confirm a productivity boom is underway as companies try to meet growing demand — and it's led by small, technology-related adjustments to how workers do their jobs.
• For now, it's not driven significantly by generative AI, which raises hope that AI implementation will yield more concrete results for worker efficiency in the future.

What they're saying: Judy Marks, CEO of Otis, the world's largest elevator and escalator manufacturing and servicing firm, says there is a microproductivity boom underway helped in part by technological advances — even if not quite at the level of generative AI yet.

• "If you were handling 12 elevator units last year, this year we need to handle 13 — but we can't just say 'work faster or smarter;' we have to give them tools," Marks said on a panel Courtenay moderated at a conference hosted by the International Economic Forum of the Americas.
• Marks cited an iPhone app that helps mechanics more quickly figure out which parts of an elevator or escalator need adjustment. Once upon a time, those workers had to use their ears, she said.
• "It's all about productivity, but not to have less labor," Marks said, adding that Otis couldn't "just create" mechanics overnight.

At the industrial conglomerate Siemens, executives are experimenting with using AI to determine what the firm's balance sheet will look like at the end of each reporting period, Siemens USA CEO Barbara Humpton told Axios in an interview on the sidelines of the conference.

• "Where that leads is: Can producing the balance sheet be something that is done automatically for us, so that our financial experts can simply focus on the management of the day-to-day business and the books can take care of themselves?" she said.
• But Humpton — who asks at the end of many meetings how staff is applying AI in their role — notes that the firm can't implement that today: "We have regulatory requirements."
• "People are in such huge demand," Humpton says. "The allure of bringing the technology in is to expand what people are capable of getting accomplished."

The bottom line: "I still think it's nascent," Marks said of AI tools. "I don't think there is a single company or any industry that isn't trying to evaluate this, apply it or figure out the ethics of this."

• But she warned that Otis wouldn't necessarily want to be a first-mover in adopting AI to actually repair an elevator, given the high stakes if something were to go wrong. "We have to do it responsibly," she said.

Americans are becoming more pessimistic about their prospects for affordable housing, based on an annual survey from the New York Fed.

Driving the news: Once a year, the bank surveys peoples' views on the outlook for rents and homebuying as part of its regular Survey of Consumer Expectations. The 2024 edition, which took place in February and was released this morning, is pretty gloomy.

• Survey respondents' expectations for the size of rent increases in the coming year rose by 1.5 percentage points to 9.7%, reversing a decline in the 2023 survey.
• The share of renters who said they believe it would be somewhat or very difficult to obtain a mortgage soared by 8.4 percentage points to 74.2% — far above the 2021 low of 50.5%.
• Renters' self-assessed odds of ever owning a home decreased by 4.3 percentage points to 40.1%, a new low in a data series that dates to 2014.

State of play: An accompanying blog post from New York Fed economists points to the power of the "lock-in" effect, in which people with ultra-low mortgages issued in 2020 and 2021 are reluctant to move.

• Among homeowners with a mortgage rate below 3%, their reported likelihood of moving in the next three years soars from about 17% to 28% if they could keep their cheap loan.