Productivity

Overview We originally launched Employ America to confront the policy failures that plagued the decade following the Global Financial Crisis of 2008 (GFC). The failure of our policymakers to support workers and sustain aggregate demand during and following recessions had been an enduring obstacle, not just during the GFC, but

This is the second post in our multi-part series on the Fed's 2025 framework review. Part 1 can be found here. The Fed has an opportunity to learn valuable lessons and apply those lessons in a forward-looking manner. By revising its framework accordingly, Fed policy can be more

After the pandemic recession, the right policy decisions resulted in a strong recovery and laid the foundations for another era of sustained productivity growth, similar to the 1990s. Sadly, in 2025, new policies are actively working against that dream.

Due to the October payroll number marred by hurricanes and the Boeing strike, the real signal comes from the household survey (where those who are absent due to weather are still counted as employed) and the negative revisions to previous months.

After taking into account data revisions and the Q3 GDP release, productivity growth is running stronger in the post-pandemic period, at about a 2% annualized pace. This stands in contrast to the sluggish ~1.4% pace observed in the pre-pandemic period. We've been productivity optimists for some time

Thanks to outperforming supply-side dynamics, the labor market has already rebalanced. At the same time, income growth is still decelerating and the lagging bits of the inflation overshoot are finally normalizing as a result. The August jobs report should shape how much and how fast the Fed should be cutting,

In this piece, we take a deeper dive into the finer details of the national accounts to gain some insight into how exactly monetary policy is restricting investment.