As the United States celebrates its 250th birthday, today’s weekly market commentary reflects upon an extraordinary record of economic growth. The past 250 years has been driven by, and fueled with, innovation and productivity. The piece makes the case (as we have frequently discussed) that Artificial Intelligence (AI) has the potential to become the next catalyst for long-term economic expansion. To make the case, the piece looks to history, and of course, explains what that may potentially mean for investors.
The enclosed chart plots 250 years of American Progression, as measure by real GDP per capita. It begins, of course, in 1776 and runs through to present day. Plotted on the chart are the years that innovations and technology markets that were introduced into the U.S. market. Canals in 1790; the steam ship in 1810; railroad in 1830; electric power in 1882; the automobile in 1886; air conditioning in 1933; cable TV in 1950; the personal computer in 1974; internet in 1989; and of course, generative AI in 2022.
Looking to the data, and as the piece explains, “U.S. real GDP per capita has soared since the founding of America, rising more the 60-fold. Because this measure adjusts for both inflation and population growth, that rise reflects genuine progress in productivity and living standards. We believe this progression has been driven by successive waves of innovation, from industrialization at the turn of the 20th century, to computing and the internet in the 1990s, to today’s advances in artificial intelligence (AI), enabling sustained gains in output per person.” – AOM 479
In terms of what this means for investors, the author makes the case that innovation has been the defining driver of U.S. economic growth over the past 250 years. If AI delivers as the next transformative technology, it has the potential to support another long period of productivity growth along with the expansion of corporate earnings and rising living standards.
We would ask that you review the attached piece at your convenience and please let us know if you have any questions or if you would like to discuss it further. And as we always end this correspondence, please remember that regardless of current momentum and regardless of the key takeaways in this weekly perspective, we will continue to monitor and manage with a thoughtful approach based on your specific long-term objectives. Thank you for your continued confidence and look forward to speaking soon.
