One of the fundamental contributors to a strong economyproductivity growthhas stubbornly insisted on remaining healthy.
During the first two full quarters of the official recession, productivityoutput per hour workedaveraged 1.8 percent growth, compared with an average of 0.14 percent in the first two quarters of the previous nine recessions, Steve Liesman reported in The Wall Street Journal. In the same report Dale Jorgenson of Harvard University and Kevin Stiroh of the New York Federal Reserve Bank say that the likely scenario for productivity growth over the next decade is a robust 2.24 percent annually, just a bit less than the 2.36 percent that fueled the economic surge from 1995 to 2000. When productivity rises, employers can pay higher wages because they are producing more with less. And output grows without straining resources, ameliorating inflation. The result: a bigger economic pie!