On net, the external sector will probably continue to be a slight drag on U.S. growth, and little if any progress is likely to be made in closing the current account deficit this year.
The state of the labor market As you know, the recovery in labor markets has not kept pace with the recovery in output, an issue that has been central in recent debates about economic policy. As has been widely noted, the leading explanation for the slow recovery in the labor market has been the remarkable ability of employers and workers to increase labor productivity.