The United States has seen a notable increase in productivity, growing by 3% in each of the three consecutive quarters, from the second to the fourth quarter of 2023. This phenomenon is unusual, as productivity peaks typically occur during recessions. However, this time, the pattern resembles the strong growth periods of the 1990s.
This rise in productivity has several positive consequences. First, it helps to contain inflation, enables higher wages, and gives the Federal Reserve (Fed) room to cut interest rates, if necessary, to further stimulate the economy.
