Not Dead Yet: Productivity is Looking Mid-Cycle

March 2019

U.S. labor productivity growth has been increasing over the last several quarters. This is strange late cycle behavior; improvements in productivity usually happen during the recovery phase of a business cycle. We see this as a sign that the business cycle has some life left to it, and a recession may not begin until after 2020.

In a normal cycle, productivity plateaus at the end of a cycle when unemployment is low. Why?

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