New Normal or Real-Time Noise? Revisiting the Recent Data on Labor Productivity
Abstract: Some economic observers have argued that the weakness of recent productivity data indicates we have entered a new era of low economic growth. To investigate that claim, we study labor productivity between 1968 and 2016 and compare recent productivity growth to its past behavior. We find that though recent productivity data are unambiguously weak, they are not greatly out of line with the variation of productivity over the historical record. We find that when labor productivity has been weak in the past, it did not persist at those levels. In addition, we find a systematic tendency to understate growth in real time, suggesting that the average rate of the past six years will likely be revised up in future.
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Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2016
Order Number: 16