While quarterly data was modest — increasing just 0.8% in the first quarter — the longer-term trend shows higher productivity growth.
Over the last several decades, labor’s share of overall income has been declining. That could have consequences for consumer spending going forward.
Widgets are a general stand-in for any produced good. But how do we think about widgets when goods are only a fraction of what we produce?
Productivity has increased, largely because more jobs are being automated — and AI is expected to speed that transformation.
The Trump administration’s tariffs are raising costs for businesses, reducing the benefits of productivity improvements.
Big jumps in living standards can follow productivity increases from new technology, but broadly shared prosperity is never a sure thing.
Real wages also grew. To some extent, productivity growth offsets the inflationary effect of pay gains.
![“We are certainly seeing areas, like transportation and logistics, leveraging technologies to make [routes] more efficient,” said Josh Hirt, senior U.S. economist at Vanguard.](https://img.apmcdn.org/8f2beda281a19c6548b681e5a55e6c88a21b1e85/widescreen/ed4e37-20251211-robotic-technology-and-vision-systems-work-on-orders-at-the-amazon-fulfillment-center-webp2000.webp)
