To understand the causes of the slowdown, it is useful to divide growth into two components: (1) growth in the cumulative number of hours of worked by all workers and (2) growth in the amount of output derived, on average, from each hour of work.
We refer to output per hour of work as “labor productivity.” From 1991 through 2007, when the economy expanded at a 3 percent average rate, hours worked increased about 1 percent a year and economy-wide productivity grew about 2 percent (figure 5).3 Since 2007, both of these growth factors have slowed by about half, with hours worked annually increasing only 0.5 percent from 2008 to 2018 and productivity rising just 1 percent on average.4 Growth in hours worked has slowed, in part, because of slower U.S. population growth.