Two Overlooked Surprises Of 2019 To Track In 2020
In the first and second quarters of 2019, productivity of U.S. workers surged. Meanwhile, the labor force participation rate was higher than expected by the U.S. Government's research arm, the nonpartisan Congressional Budget Office.
Growth in the rate of productivity and in the number of Americans age 16 to 65 accounts for the total potential growth of the economy — U.S. gross domestic product.
Could the labor force participation rate keep exceeding projections by the CBO? Perhaps, but it's unlikely. That's a variable in the growth equation that's well defined; demographics don't suddenly change and are predictable. However, productivity growth is more of a mystery.
Labor force productivity gains are driven by automation, technology, and improved work methods. The science of modern economics has yet to figure out how to trigger growth in automation, technology, and work methods, never mind predict it.
What we do know, according to research we license from independent economist Fritz Meyer, is that productivity has been accelerating since 2012. The trend of the actual rate of growth in productivity is sharply higher than the CBO's forecast. If productivity growth, the mystery factory in American economic advancement, were to continue to accelerate at the nascent trend established since 2012, the U.S. economy would exceed expectations.
© 2020 Advisor Products Inc. All Rights Reserved.
- How Negative Yields In Europe Could Drive Stocks Higher
- Will Negative Rates Abroad Boost U.S. Stocks?
- Tax Law Changes Delayed But Not Dead
- About The Weakness In Manufacturing
- Is The Inverted Yield Curve The Financial Fakeout Of 2019?
- Retirement Income Alert: Do You Own A $1 Million Plus IRA In A High Income-Tax State?
- How Can We Help You Die In Peace?
- A Primer On Setting Up A Trust Fund
- Three Strategic Mid-Year Tax Tips
- How To Avoid State Income Tax On Distributions From IRAs
- Watch The Fed Closely In The Months Ahead
- Say Goodbye To Stretch IRAs And Get A New Plan
- Tax Alert: Plan Now For The Demise Of Stretch IRAs
- Prepare For A Sweeping New Law On Retirement Account Taxes
- U.S. - China Trade War Coverage Distorts Economic Reality