The Indicator from Planet Money Why U.S. workers keep getting more productive
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Jun 6, 2025 U.S. labor productivity has seen a surprising rise, leaving economists puzzled. The president of the Federal Reserve Bank of Chicago uncovers theories, including how the pandemic spurred productivity rebounds. There's a fascinating discussion on how AI might reshape productivity trends, echoing past technological revolutions. The implications for wages and economic stability are examined, revealing the complexities of interpreting productivity figures and the challenges of sustaining this growth.
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Recent Surge in U.S. Productivity Growth
- U.S. labor productivity grew about 1% per year in the 2010s but recently jumped to around 2% per year.
- This sustained increase after the pandemic recovery puzzles economists, marking a notable productivity boom.
Benefits of Productivity Growth
- Sustained productivity growth allows wages to rise without causing inflation.
- Higher productivity can ease short-term interest rate pressures and strengthen economic wealth.
Work-from-Home's Productivity Impact
- Flexibility from working at home likely caused a one-time productivity increase, not sustained growth.
- It improved productivity levels but can't explain continuing higher growth rates post-pandemic.