Nonfarm business productivity—the goods and services produced each hour by American workers—decreased at a 0.5 percent seasonally adjusted annual rate, the Labor Department said Tuesday. It was the third consecutive quarter of falling productivity, the longest such streak since 1979.
That was a further step down from already tepid average annual productivity growth of 1.3 percent in 2007 through 2015, which itself was just half the pace seen in 2000 through 2007. Moreover, the year-over-year rate fell 0.4 percent last quarter, it first annual decline in three years. It’s no coincidence that GDP has running at a roughly 1 percent pace for the past three quarters.
Productivity growth has averaged just 1.3 percent since 2007, half of the 2.6 percent that rate was at from 2000 to 2007. It’s even further away from the 3 percent rate seen in the boom years of the 1990s.