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Productivity Problem
03/04/2015 |
While 3.2 million new jobs were created in 2014 making it a great year for job creation, GDP grew by a very pedestrian 2.4%. This suggests that labor productivity is either growing very slowly, or worse, may be declining. Either way, it means when labor force slack disappears inflation pressures may quickly build, absent Fed intervention. Moreover, living standards are likely to rise very slowly unless this trend reverses.