Quarter after quarter the macroeconomic news from the United States teaches the same lesson: real GDP growth at a sustained rate of 3% per year is not enough to increase America's employment level. Not even real GDP growth at a sustained annual rate of 4% is sufficient to increase the share of American adults who have jobs. The underlying rate of labor productivity growth in the US, which we pegged at 1.2% per year at the start of the Clinton administration and at 2% to 2.5% per year at the end of the 1990's boom, now seems even higher: it is getting harder and harder to keep the estimated labor productivity growth trend below 3% per year.
Quarter after quarter the macroeconomic news from the United States teaches the same lesson: real GDP growth at a sustained rate of 3% per year is not enough to increase America's employment level. Not even real GDP growth at a sustained annual rate of 4% is sufficient to increase the share of American adults who have jobs. The underlying rate of labor productivity growth in the US, which we pegged at 1.2% per year at the start of the Clinton administration and at 2% to 2.5% per year at the end of the 1990's boom, now seems even higher: it is getting harder and harder to keep the estimated labor productivity growth trend below 3% per year.