The pandemic distorted the economy in many ways, including derailing the productivity boom that we’d been expecting would characterize this decade—our Roaring 2020s scenario. That boom now may be back on track; productivity growth was well above the historical average during the past three quarters. If so, the ramifications for economic growth would be profound, as GDP growth is a function of labor force growth plus productivity growth.
We track the impact of productivity growth by monitoring inflation-adjusted wages, unemployment, unit labor costs, and price inflation rates.
Also: Productivity seems to be on the mind of Fed Chair Powell.
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