Even discounting somewhat the phenomenal strength of the growth of output per hour of late, one cannot help but be impressed with how well productivity has held up in the face of the abrupt slowing of the economy in late 2000 and in 2001.
That performance has been encouraging because the nation’s fortunes, to a very great degree, will depend on the evolution of the growth of productivity. In particular, productivity will play a central role in determining the nature of the economy’s response to the aging of the population soon upon us. Most economic forecasts are subject to significant uncertainty.