All schools of economics believe the magic cure-all for almost everything is productivity growth. If the rate of inflation is too high, increasing productivity will tame it. If the national debt-to-GDP ratio is too high, productivity growth will tame it. It could probably cure the common cold as well?
It is one of the most important of the 130 pieces of economic data released each month, and I watch it closely. It has averaged 1.6% since the current recovery began in 2009. The latest data is a stronger-than-expected 2.0%. That is much more than a "green sprout." It is a small green tree!
Increasing productivity means business is getting more results with the same amount of resources. It means workers are producing more products at a faster rate than their wages are increasing. It means an improved profit margin. It means greater corporate profits, which is the "mother's milk" of stock prices. It means a rising stock market.
Because there is so much agreement on the importance of productivity growth, it is not surprising that government has tried to boost it. Unfortunately, there is little they can do. Every few years, they look at an investment tax credit for machinery purchased to increase productivity, but beyond that, there is little else the government can do.
Frankly, it doesn't look like it needs any help from the government. Productivity is growing nicely.
It is one of the most important of the 130 pieces of economic data released each month, and I watch it closely. It has averaged 1.6% since the current recovery began in 2009. The latest data is a stronger-than-expected 2.0%. That is much more than a "green sprout." It is a small green tree!
Increasing productivity means business is getting more results with the same amount of resources. It means workers are producing more products at a faster rate than their wages are increasing. It means an improved profit margin. It means greater corporate profits, which is the "mother's milk" of stock prices. It means a rising stock market.
Because there is so much agreement on the importance of productivity growth, it is not surprising that government has tried to boost it. Unfortunately, there is little they can do. Every few years, they look at an investment tax credit for machinery purchased to increase productivity, but beyond that, there is little else the government can do.
Frankly, it doesn't look like it needs any help from the government. Productivity is growing nicely.
