U.S. private sector productivity rose by 2.3% during Q3, according to the Bureau of Labour Statistics, following a massive hike in deficit spending by the Trump Administration.
These data matter.
If each of us produces more each year, we make ourselves richer … but more importantly, through the progressive income tax system, we also make each other richer.
However, longer term, annual U.S. productivity gains have slipped from an average of 2.3% during the seven decades starting in Q4 1948 to just 1.1% in the decade following the start of the 2007 financial crisis.
Worse, there are growing signs that U.S. labour productivity is not just slowing, it’s in a freefall.
The idea that American productivity is collapsing seems ludicrous. This, during a time of an increasingly educated population, exploding technology and communications power, as well as the proliferation of AI, mobile devices and robotized manufacturing processes.
However, a range of forces are pushing in the opposite direction: