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The Great Productivity Boom Is Taking a Break
May 10, 2025
|Financial Express Lucknow
THE GREAT PRODUCTIVITY boom of the 2020s isn't over, but it's having an interlude.
And it could become a long one if President Donald Trump remains committed to protectionist policies that make the economy less efficient. Ultimately, artificial intelligence will help, but it may take a while.
After an impressive streak in the past two years, labour productivity—or nonfarm employee output per hour—declined at a 0.8% annualised rate in the first quarter, the first such decline since 2022. For all the caveats about Thursday's statistic (the quarter-to-quarter data is notoriously noisy), it's sure to burst the bubbles of fellow productivity bulls, who hoped it could sustain economic growth even as reduced immigration slows the expansion of the labour force.
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