Despite strong economic growth and historically low unemployment, a government report released Thursday pointed to an important missing ingredient so far in the U.S. expansion: worker-productivity improvements.
Output per hour for workers in nonfarm businesses rose 1.3% in the third quarter from a year earlier, marking the 32nd straight quarter of yearly growth below 2%, a long and consistent stretch of anemic growth that hasn’t happened before in the post-World War II era.
There were some signs of improvement. For a six-month period between April and September, worker productivity gains beat a 2% annualized growth rate. Jim O’Sullivan, an economist at High Frequency Economics, called that “strong by recent standards” and Daniel Silver at JPMorgan Chase & Co. called it “solid.”
Still, there have been previous six-months bursts of growth like that in this expansion that weren’t sustained and thus didn’t develop into strong yearly growth. If the latest six-month stretch doesn’t hold up, some economists say, the economy’s fast overall growth rate won’t be sustained.
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