Peaking Out

Since the previous GDP peak in 12/07, real GDP has risen 3.18% or about $400 billion, yet total employment is down by 2.07% or about 2.9 million persons. This is because today’s workers are more productive. How much more? In 12/07, GDP/worker was $96,526; now it’s $101,706, an increase of 5.37%. Because productivity/worker usually increases, it’s essential for GDP growth to exceed 2%, otherwise recovering lost jobs is nearly impossible.