Board of Governors of the Federal Reserve System

Figure 1: Labor market is healthy

Left panel: Employment

3-month average monthly gain

Period	Thousands
January 2010	-94
February 2010	-120
March 2010	12
April 2010	70
May 2010	134
June 2010	127
July 2010	92
August 2010	82
September 2010	59
October 2010	122
November 2010	137
December 2010	158
January 2011	84
February 2011	106
March 2011	152
April 2011	253
May 2011	215
June 2011	218
July 2011	126
August 2011	137
September 2011	141
October 2011	185
November 2011	198
December 2011	185
January 2012	230
February 2012	267
March 2012	278
April 2012	190
May 2012	143
June 2012	92
July 2012	115
August 2012	140
September 2012	171
October 2012	168
November 2012	154
December 2012	175
January 2013	194
February 2013	248
March 2013	212
April 2013	213
May 2013	182
June 2013	185
July 2013	168
August 2013	185
September 2013	198
October 2013	214
November 2013	222
December 2013	175
January 2014	174
February 2014	133
March 2014	209
April 2014	250
May 2014	265
June 2014	276
July 2014	250
August 2014	252
September 2014	245
October 2014	235
November 2014	272
December 2014	274
January 2015	281
February 2015	259
March 2015	190
April 2015	200
May 2015	203
June 2015	251
July 2015	259
August 2015	218
September 2015	192
October 2015	198
November 2015	241
December 2015	282
January 2016	240
February 2016	224
March 2016	203
April 2016	200

Middle panel: Labor Force Participation Rate

Period	Percent
January 2007	66.4
February 2007	66.3
March 2007	66.2
April 2007	65.9
May 2007	66.0
June 2007	66.0
July 2007	66.0
August 2007	65.8
September 2007	66.0
October 2007	65.8
November 2007	66.0
December 2007	66.0
January 2008	66.2
February 2008	66.0
March 2008	66.1
April 2008	65.9
May 2008	66.1
June 2008	66.1
July 2008	66.1
August 2008	66.1
September 2008	66.0
October 2008	66.0
November 2008	65.9
December 2008	65.8
January 2009	65.7
February 2009	65.8
March 2009	65.6
April 2009	65.7
May 2009	65.7
June 2009	65.7
July 2009	65.5
August 2009	65.4
September 2009	65.1
October 2009	65.0
November 2009	65.0
December 2009	64.6
January 2010	64.8
February 2010	64.9
March 2010	64.9
April 2010	65.2
May 2010	64.9
June 2010	64.6
July 2010	64.6
August 2010	64.7
September 2010	64.6
October 2010	64.4
November 2010	64.6
December 2010	64.3
January 2011	64.2
February 2011	64.1
March 2011	64.2
April 2011	64.2
May 2011	64.1
June 2011	64.0
July 2011	64.0
August 2011	64.1
September 2011	64.2
October 2011	64.1
November 2011	64.1
December 2011	64.0
January 2012	63.7
February 2012	63.8
March 2012	63.8
April 2012	63.7
May 2012	63.7
June 2012	63.8
July 2012	63.7
August 2012	63.5
September 2012	63.7
October 2012	63.8
November 2012	63.6
December 2012	63.7
January 2013	63.6
February 2013	63.4
March 2013	63.3
April 2013	63.4
May 2013	63.4
June 2013	63.4
July 2013	63.3
August 2013	63.2
September 2013	63.3
October 2013	62.8
November 2013	63.0
December 2013	62.9
January 2014	62.9
February 2014	63.0
March 2014	63.2
April 2014	62.8
May 2014	62.8
June 2014	62.8
July 2014	62.9
August 2014	62.9
September 2014	62.8
October 2014	62.9
November 2014	62.9
December 2014	62.7
January 2015	62.9
February 2015	62.8
March 2015	62.7
April 2015	62.7
May 2015	62.8
June 2015	62.6
July 2015	62.6
August 2015	62.6
September 2015	62.4
October 2015	62.5
November 2015	62.5
December 2015	62.6
January 2016	62.7
February 2016	62.9
March 2016	63.0
April 2016	62.8

Right panel: Average Hourly Earnings

12-month percent change

Period	Actual	Smoothed
March 2007	3.443	3.471
April 2007	3.127	3.422
May 2007	3.527	3.373
June 2007	3.609	3.323
July 2007	3.251	3.272
August 2007	3.346	3.224
September 2007	3.087	3.175
October 2007	3.033	3.119
November 2007	3.073	3.064
December 2007	2.915	3.022
January 2008	2.913	2.981
February 2008	2.853	2.967
March 2008	3.039	2.952
April 2008	2.887	2.978
May 2008	3.071	3.004
June 2008	2.672	3.062
July 2008	3.053	3.119
August 2008	3.333	3.190
September 2008	3.279	3.260
October 2008	3.324	3.317
November 2008	3.502	3.373
December 2008	3.588	3.374
January 2009	3.585	3.375
February 2009	3.432	3.307
March 2009	3.277	3.239
April 2009	3.368	3.122
May 2009	2.933	3.006
June 2009	2.881	2.870
July 2009	2.685	2.735
August 2009	2.442	2.604
September 2009	2.439	2.472
October 2009	2.528	2.363
November 2009	2.149	2.254
December 2009	1.960	2.167
January 2010	2.095	2.080
February 2010	2.091	2.014
March 2010	1.813	1.947
April 2010	1.810	1.909
May 2010	1.900	1.871
June 2010	1.762	1.852
July 2010	1.849	1.834
August 2010	1.754	1.831
September 2010	1.842	1.827
October 2010	1.927	1.831
November 2010	1.791	1.834
December 2010	1.743	1.849
January 2011	1.918	1.864
February 2011	1.825	1.894
March 2011	1.825	1.924
April 2011	1.867	1.951
May 2011	2.042	1.978
June 2011	2.130	1.998
July 2011	2.302	2.018
August 2011	1.945	2.020
September 2011	1.941	2.022
October 2011	2.067	2.005
November 2011	1.979	1.989
December 2011	2.065	1.973
January 2012	1.751	1.957
February 2012	1.793	1.942
March 2012	2.143	1.928
April 2012	2.051	1.915
May 2012	1.783	1.902
June 2012	1.956	1.897
July 2012	1.774	1.892
August 2012	1.865	1.903
September 2012	2.034	1.914
October 2012	1.551	1.937
November 2012	1.940	1.960
December 2012	2.152	1.986
January 2013	2.151	2.011
February 2013	2.148	2.040
March 2013	1.926	2.068
April 2013	2.052	2.085
May 2013	2.094	2.102
June 2013	2.217	2.111
July 2013	1.956	2.121
August 2013	2.299	2.130
September 2013	2.078	2.139
October 2013	2.249	2.143
November 2013	2.242	2.147
December 2013	1.981	2.140
January 2014	2.021	2.134
February 2014	2.313	2.123
March 2014	2.184	2.113
April 2014	1.969	2.106
May 2014	2.135	2.099
June 2014	2.043	2.085
July 2014	2.085	2.071
August 2014	2.164	2.057
September 2014	2.036	2.042
October 2014	1.992	2.045
November 2014	2.110	2.047
December 2014	1.694	2.063
January 2015	2.187	2.080
February 2015	1.932	2.104
March 2015	2.219	2.128
April 2015	2.342	2.168
May 2015	2.336	2.208
June 2015	2.002	2.254
July 2015	2.247	2.299
August 2015	2.322	2.335
September 2015	2.362	2.371
October 2015	2.563	2.390
November 2015	2.391	2.408
December 2015	2.641	2.427
January 2016	2.504	2.446
February 2016	2.379	2.462
March 2016	2.332	2.479
April 2016	2.489	2.492

Source: Bureau of Labor Statistics.

 

 

Table 1: Projections of GDP growth have been optimistic, while those for unemployment have been pessimistic

Recent Forecast Record for Blue Chip

	GDP (4-qtr. % change)			Unemployment rate (4th qtr.)
	Actual	Forecast	Difference	Actual	Forecast	Difference
2011	1.7	3.3	-1.6	8.7	9.1	-.4
2012	1.3	2.6	-1.0	7.8	8.5	-.7
2013	2.5	2.5	.2	7.0	7.6	-.6
2014	2.5	2.7	-.2	5.7	6.2	-.5
2015	2.0	2.8	-.8	5.0	5.2	-.2

Note: Forecasts were made in January/March of year indicated. GDP is gross domestic product.

Source: Wolters Kluwer Legal and Regulatory Solutions U.S., Blue Chip Economic Indicators; Bureau of Economic Analysis; Bureau of Labor Statistics.

 

 

Table 2: Estimates of long-run potential GDP growth have moved down

Long-Range GDP Forecasts (percent)

	Blue Chip	SPF	CBO	FOMC
2007	2.9	3.0	2.6	NA
2008	2.7	2.8	2.6	NA
2009	2.6	2.6	2.2	2.6
2010	2.6	2.7	2.2	2.7
2011	2.6	2.8	2.3	2.7
2012	2.5	2.6	2.3	2.5
2013	2.5	2.5	2.2	2.4
2014	2.4	2.6	2.1	2.3
2015	2.3	2.5	2.1	2.2
2016	2.1	2.3	1.9	2.0

Note: GDP is gross domestic product; SPF is Survey of Professional Forecasters; CBO is Congressional Budget Office; FOMC is Federal Open Market Committee; NA is not available.

Source: Congressional Budget Office; Federal Reserve Bank of Philadelphia, Survey of Professional Forecasters; Wolters Kluwer Legal and Regulatory Solutions U.S., Blue Chip Economic Indicators.

 

 

Figure 2: Productivity growth is low

Business-Sector Labor Productivity

Percent

Period	8-qtr. average	Average
1950:Q1	3.4	3.3
1950:Q2	4.3	3.3
1950:Q3	4.8	3.3
1950:Q4	5.2	3.3
1951:Q1	5.4	3.3
1951:Q2	5.7	3.3
1951:Q3	5.7	3.3
1951:Q4	5.6	3.3
1952:Q1	5.0	3.3
1952:Q2	4.4	3.3
1952:Q3	3.6	3.3
1952:Q4	3.0	3.3
1953:Q1	3.2	3.3
1953:Q2	3.4	3.3
1953:Q3	3.5	3.3
1953:Q4	3.4	3.3
1954:Q1	3.0	3.3
1954:Q2	2.7	3.3
1954:Q3	2.8	3.3
1954:Q4	3.0	3.3
1955:Q1	3.2	3.3
1955:Q2	3.4	3.3
1955:Q3	3.3	3.3
1955:Q4	3.2	3.3
1956:Q1	3.1	3.3
1956:Q2	2.9	3.3
1956:Q3	2.5	3.3
1956:Q4	2.3	3.3
1957:Q1	1.9	3.3
1957:Q2	1.6	3.3
1957:Q3	1.6	3.3
1957:Q4	1.7	3.3
1958:Q1	1.9	3.3
1958:Q2	2.3	3.3
1958:Q3	2.9	3.3
1958:Q4	3.0	3.3
1959:Q1	3.3	3.3
1959:Q2	3.5	3.3
1959:Q3	3.4	3.3
1959:Q4	3.2	3.3
1960:Q1	3.6	3.3
1960:Q2	3.4	3.3
1960:Q3	3.1	3.3
1960:Q4	2.7	3.3
1961:Q1	1.9	3.3
1961:Q2	1.8	3.3
1961:Q3	2.1	3.3
1961:Q4	2.7	3.3
1962:Q1	3.1	3.3
1962:Q2	3.3	3.3
1962:Q3	3.7	3.3
1962:Q4	4.1	3.3
1963:Q1	4.7	3.3
1963:Q2	4.7	3.3
1963:Q3	4.6	3.3
1963:Q4	4.2	3.3
1964:Q1	4.0	3.3
1964:Q2	4.0	3.3
1964:Q3	3.8	3.3
1964:Q4	3.6	3.3
1965:Q1	3.5	3.3
1965:Q2	3.3	3.3
1965:Q3	3.2	3.3
1965:Q4	3.5	3.3
1966:Q1	3.7	3.3
1966:Q2	3.8	3.3
1966:Q3	3.9	3.3
1966:Q4	3.9	3.3
1967:Q1	3.8	3.3
1967:Q2	3.8	3.3
1967:Q3	3.7	3.3
1967:Q4	3.2	3.3
1968:Q1	2.9	3.3
1968:Q2	2.7	3.3
1968:Q3	2.8	3.3
1968:Q4	2.9	3.3
1969:Q1	2.9	3.3
1969:Q2	2.6	3.3
1969:Q3	2.3	3.3
1969:Q4	2.0	3.3
1970:Q1	1.6	3.3
1970:Q2	1.4	3.3
1970:Q3	1.3	3.3
1970:Q4	1.2	3.3
1971:Q1	1.7	3.3
1971:Q2	2.2	3.3
1971:Q3	2.6	3.3
1971:Q4	3.0	3.3
1972:Q1	3.2	3.3
1972:Q2	3.4	3.3
1972:Q3	3.4	3.3
1972:Q4	3.7	3.3
1973:Q1	3.7	3.3
1973:Q2	3.6	3.3
1973:Q3	3.4	3.3
1973:Q4	3.1	3.3
1974:Q1	2.7	1.5
1974:Q2	2.0	1.5
1974:Q3	1.4	1.5
1974:Q4	0.7	1.5
1975:Q1	0.1	1.5
1975:Q2	0.1	1.5
1975:Q3	0.5	1.5
1975:Q4	0.9	1.5
1976:Q1	1.7	1.5
1976:Q2	2.4	1.5
1976:Q3	2.9	1.5
1976:Q4	3.4	1.5
1977:Q1	3.5	1.5
1977:Q2	3.3	1.5
1977:Q3	3.0	1.5
1977:Q4	2.5	1.5
1978:Q1	2.0	1.5
1978:Q2	1.8	1.5
1978:Q3	1.5	1.5
1978:Q4	1.5	1.5
1979:Q1	1.5	1.5
1979:Q2	1.2	1.5
1979:Q3	0.9	1.5
1979:Q4	0.6	1.5
1980:Q1	0.7	1.5
1980:Q2	0.4	1.5
1980:Q3	0.2	1.5
1980:Q4	0.0	1.5
1981:Q1	0.0	1.5
1981:Q2	0.3	1.5
1981:Q3	0.8	1.5
1981:Q4	1.1	1.5
1982:Q1	0.9	1.5
1982:Q2	0.9	1.5
1982:Q3	0.8	1.5
1982:Q4	0.8	1.5
1983:Q1	0.8	1.5
1983:Q2	1.0	1.5
1983:Q3	1.1	1.5
1983:Q4	1.4	1.5
1984:Q1	2.1	1.5
1984:Q2	2.5	1.5
1984:Q3	3.0	1.5
1984:Q4	3.2	1.5
1985:Q1	3.2	1.5
1985:Q2	2.9	1.5
1985:Q3	2.7	1.5
1985:Q4	2.5	1.5
1986:Q1	2.5	1.5
1986:Q2	2.6	1.5
1986:Q3	2.6	1.5
1986:Q4	2.5	1.5
1987:Q1	2.4	1.5
1987:Q2	2.2	1.5
1987:Q3	1.9	1.5
1987:Q4	1.7	1.5
1988:Q1	1.5	1.5
1988:Q2	1.2	1.5
1988:Q3	1.1	1.5
1988:Q4	1.0	1.5
1989:Q1	1.1	1.5
1989:Q2	1.2	1.5
1989:Q3	1.3	1.5
1989:Q4	1.3	1.5
1990:Q1	1.4	1.5
1990:Q2	1.5	1.5
1990:Q3	1.6	1.5
1990:Q4	1.7	1.5
1991:Q1	1.7	1.5
1991:Q2	1.7	1.5
1991:Q3	1.8	1.5
1991:Q4	2.0	1.5
1992:Q1	2.4	1.5
1992:Q2	2.6	1.5
1992:Q3	2.8	1.5
1992:Q4	3.1	1.5
1993:Q1	3.2	1.5
1993:Q2	3.0	1.5
1993:Q3	2.7	1.5
1993:Q4	2.3	1.5
1994:Q1	1.8	1.5
1994:Q2	1.4	1.5
1994:Q3	0.9	1.5
1994:Q4	0.5	1.5
1995:Q1	0.3	1.5
1995:Q2	0.2	1.5
1995:Q3	0.4	1.5
1995:Q4	0.6	1.5
1996:Q1	0.7	3.2
1996:Q2	1.0	3.2
1996:Q3	1.4	3.2
1996:Q4	1.7	3.2
1997:Q1	1.9	3.2
1997:Q2	2.1	3.2
1997:Q3	2.2	3.2
1997:Q4	2.4	3.2
1998:Q1	2.6	3.2
1998:Q2	2.5	3.2
1998:Q3	2.4	3.2
1998:Q4	2.5	3.2
1999:Q1	2.8	3.2
1999:Q2	3.0	3.2
1999:Q3	3.1	3.2
1999:Q4	3.3	3.2
2000:Q1	3.2	3.2
2000:Q2	3.4	3.2
2000:Q3	3.4	3.2
2000:Q4	3.4	3.2
2001:Q1	3.3	3.2
2001:Q2	3.2	3.2
2001:Q3	3.2	3.2
2001:Q4	3.1	3.2
2002:Q1	3.5	3.2
2002:Q2	3.5	3.2
2002:Q3	3.6	3.2
2002:Q4	3.6	3.2
2003:Q1	3.5	3.2
2003:Q2	3.6	3.2
2003:Q3	3.8	3.2
2003:Q4	4.1	3.2
2004:Q1	4.0	3.2
2004:Q2	3.9	3.2
2004:Q3	3.6	3.2
2004:Q4	3.5	3.2
2005:Q1	3.6	1.3
2005:Q2	3.4	1.3
2005:Q3	3.1	1.3
2005:Q4	2.7	1.3
2006:Q1	2.2	1.3
2006:Q2	2.0	1.3
2006:Q3	1.7	1.3
2006:Q4	1.5	1.3
2007:Q1	1.2	1.3
2007:Q2	1.1	1.3
2007:Q3	1.2	1.3
2007:Q4	1.2	1.3
2008:Q1	1.2	1.3
2008:Q2	1.2	1.3
2008:Q3	1.3	1.3
2008:Q4	1.1	1.3
2009:Q1	1.3	1.3
2009:Q2	1.5	1.3
2009:Q3	1.6	1.3
2009:Q4	2.1	1.3
2010:Q1	2.5	1.3
2010:Q2	2.8	1.3
2010:Q3	3.1	1.3
2010:Q4	3.3	1.3
2011:Q1	3.2	1.3
2011:Q2	2.9	1.3
2011:Q3	2.4	1.3
2011:Q4	1.7	1.3
2012:Q1	1.1	1.3
2012:Q2	0.8	1.3
2012:Q3	0.6	1.3
2012:Q4	0.4	1.3
2013:Q1	0.4	1.3
2013:Q2	0.3	1.3
2013:Q3	0.4	1.3
2013:Q4	0.6	1.3
2014:Q1	0.5	1.3
2014:Q2	0.5	1.3
2014:Q3	0.5	1.3
2014:Q4	0.6	1.3
2015:Q1	0.6	1.3
2015:Q2	0.7	1.3
2015:Q3	0.8	1.3
2015:Q4	0.7	1.3
2016:Q1	0.7	1.3

Source: Bureau of Labor Statistics.

 

 

Figure 3: Productivity slowdown is global

GDP per hour worked in OECD countries

Average percent change

	1995-2004	2005-2014	Difference
Greece	3.00	-0.26	-3.26
Norway	2.48	-0.29	-2.77
Ireland	4.66	2.03	-2.63
Poland	5.18	2.65	-2.53
Finland	2.70	0.54	-2.16
Sweden	2.72	0.75	-1.97
United Kingdom	2.23	0.45	-1.78
Korea	5.36	3.63	-1.73
Turkey	3.34	1.63	-1.71
Czech Republic	3.47	1.81	-1.66
Iceland	2.75	1.44	-1.31
Hungary	3.38	2.07	-1.31
France	1.97	0.72	-1.25
United States	2.28	1.10	-1.18
Japan	2.00	0.87	-1.13
Luxembourg	1.17	0.23	-0.94
Netherlands	1.52	0.62	-0.90
Denmark	1.35	0.47	-0.88
Chile	3.47	2.61	-0.86
Germany	1.73	0.87	-0.86
Australia	2.14	1.31	-0.83
Belgium	1.31	0.49	-0.82
Italy	0.82	0.05	-0.77
Canada	1.44	1.00	-0.44
Mexico	0.76	0.39	-0.37
Switzerland	1.41	1.06	-0.35
Portugal	1.41	1.07	-0.34
New Zealand	1.22	0.92	-0.30
Israel	1.33	1.19	-0.14
Spain	0.21	1.31	1.10

Note: GDP is gross domestic product; OECD is Organisation for Economic Cooperation and Development.

Source: Organisation for Economic Co-operation and Development, "Growth in GDP per Capita, productivity and ULC."

 

 

Figure 4: Capital deepening is anemic

Contribution of Capital Deepening to Productivity Growth

Period	Percent change
1980:Q1	1.30
1980:Q2	1.87
1980:Q3	2.14
1980:Q4	1.76
1981:Q1	1.38
1981:Q2	0.89
1981:Q3	0.83
1981:Q4	1.39
1982:Q1	2.12
1982:Q2	1.95
1982:Q3	2.04
1982:Q4	2.03
1983:Q1	1.09
1983:Q2	0.71
1983:Q3	-0.13
1983:Q4	-0.77
1984:Q1	-0.89
1984:Q2	-0.72
1984:Q3	-0.03
1984:Q4	0.37
1985:Q1	0.65
1985:Q2	0.81
1985:Q3	0.83
1985:Q4	0.82
1986:Q1	1.04
1986:Q2	1.25
1986:Q3	1.04
1986:Q4	0.83
1987:Q1	0.37
1987:Q2	0.02
1987:Q3	-0.01
1987:Q4	-0.01
1988:Q1	0.43
1988:Q2	0.27
1988:Q3	0.48
1988:Q4	0.44
1989:Q1	0.18
1989:Q2	0.52
1989:Q3	0.43
1989:Q4	0.75
1990:Q1	0.92
1990:Q2	1.15
1990:Q3	1.45
1990:Q4	1.51
1991:Q1	1.88
1991:Q2	1.81
1991:Q3	1.55
1991:Q4	1.43
1992:Q1	1.19
1992:Q2	0.78
1992:Q3	0.72
1992:Q4	0.51
1993:Q1	0.21
1993:Q2	0.13
1993:Q3	0.05
1993:Q4	0.01
1994:Q1	0.00
1994:Q2	-0.21
1994:Q3	-0.39
1994:Q4	-0.28
1995:Q1	-0.24
1995:Q2	0.34
1995:Q3	0.44
1995:Q4	0.67
1996:Q1	0.97
1996:Q2	0.79
1996:Q3	0.93
1996:Q4	0.60
1997:Q1	0.24
1997:Q2	0.38
1997:Q3	0.50
1997:Q4	0.88
1998:Q1	1.16
1998:Q2	1.19
1998:Q3	1.36
1998:Q4	1.03
1999:Q1	1.24
1999:Q2	1.20
1999:Q3	1.06
1999:Q4	1.39
2000:Q1	1.19
2000:Q2	1.43
2000:Q3	1.62
2000:Q4	1.89
2001:Q1	2.03
2001:Q2	2.25
2001:Q3	2.43
2001:Q4	2.38
2002:Q1	2.43
2002:Q2	1.89
2002:Q3	1.57
2002:Q4	1.14
2003:Q1	1.00
2003:Q2	1.18
2003:Q3	0.92
2003:Q4	0.78
2004:Q1	0.52
2004:Q2	0.35
2004:Q3	0.29
2004:Q4	0.45
2005:Q1	0.54
2005:Q2	0.36
2005:Q3	0.62
2005:Q4	0.60
2006:Q1	0.44
2006:Q2	0.64
2006:Q3	0.46
2006:Q4	0.43
2007:Q1	0.60
2007:Q2	0.61
2007:Q3	0.90
2007:Q4	1.04
2008:Q1	1.18
2008:Q2	1.40
2008:Q3	1.61
2008:Q4	2.35
2009:Q1	3.01
2009:Q2	3.39
2009:Q3	3.26
2009:Q4	2.29
2010:Q1	1.29
2010:Q2	0.23
2010:Q3	-0.30
2010:Q4	-0.42
2011:Q1	-0.41
2011:Q2	-0.30
2011:Q3	-0.31
2011:Q4	-0.31
2012:Q1	-0.49
2012:Q2	-0.20
2012:Q3	-0.08
2012:Q4	0.02
2013:Q1	0.28
2013:Q2	0.22
2013:Q3	0.14
2013:Q4	0.19
2014:Q1	0.13
2014:Q2	-0.04
2014:Q3	-0.05
2014:Q4	-0.31
2015:Q1	-0.26
2015:Q2	-0.08
2015:Q3	0.22
2015:Q4	0.32
2016:Q1	0.28

Source: John Fernald (2014), "Productivity and Potential Output before, during, and after the Great Recession," NBER Working Paper Series 20248 (Cambridge, Mass.: National Bureau of Economic Research, June).

 

 

Figure 5: Total factor productivity growth has slowed

Business-Sector TFP

Five-year average

Period	Percent change
1951:Q2	2.52
1951:Q3	2.80
1951:Q4	2.62
1952:Q1	2.49
1952:Q2	2.60
1952:Q3	2.81
1952:Q4	3.02
1953:Q1	2.79
1953:Q2	2.46
1953:Q3	2.50
1953:Q4	2.18
1954:Q1	2.45
1954:Q2	2.63
1954:Q3	2.50
1954:Q4	2.96
1955:Q1	2.47
1955:Q2	2.30
1955:Q3	1.91
1955:Q4	1.78
1956:Q1	1.79
1956:Q2	1.84
1956:Q3	1.39
1956:Q4	1.75
1957:Q1	1.75
1957:Q2	1.57
1957:Q3	1.59
1957:Q4	1.22
1958:Q1	0.64
1958:Q2	0.71
1958:Q3	1.20
1958:Q4	1.77
1959:Q1	2.07
1959:Q2	2.16
1959:Q3	1.83
1959:Q4	1.54
1960:Q1	1.64
1960:Q2	1.05
1960:Q3	0.98
1960:Q4	0.90
1961:Q1	1.09
1961:Q2	1.53
1961:Q3	1.79
1961:Q4	1.69
1962:Q1	1.77
1962:Q2	1.92
1962:Q3	2.04
1962:Q4	2.25
1963:Q1	2.63
1963:Q2	2.65
1963:Q3	2.60
1963:Q4	2.36
1964:Q1	2.31
1964:Q2	2.17
1964:Q3	2.44
1964:Q4	2.39
1965:Q1	2.28
1965:Q2	2.66
1965:Q3	3.01
1965:Q4	3.47
1966:Q1	3.68
1966:Q2	3.04
1966:Q3	2.80
1966:Q4	2.62
1967:Q1	2.56
1967:Q2	2.58
1967:Q3	2.40
1967:Q4	2.26
1968:Q1	2.53
1968:Q2	2.53
1968:Q3	2.29
1968:Q4	2.22
1969:Q1	1.98
1969:Q2	1.85
1969:Q3	1.68
1969:Q4	1.57
1970:Q1	1.13
1970:Q2	1.18
1970:Q3	1.11
1970:Q4	0.62
1971:Q1	0.78
1971:Q2	0.92
1971:Q3	1.15
1971:Q4	1.09
1972:Q1	1.24
1972:Q2	1.47
1972:Q3	1.59
1972:Q4	1.87
1973:Q1	1.86
1973:Q2	1.66
1973:Q3	1.38
1973:Q4	1.44
1974:Q1	1.08
1974:Q2	1.01
1974:Q3	0.79
1974:Q4	0.81
1975:Q1	0.96
1975:Q2	1.14
1975:Q3	1.20
1975:Q4	1.48
1976:Q1	1.34
1976:Q2	1.41
1976:Q3	1.27
1976:Q4	1.32
1977:Q1	1.24
1977:Q2	1.11
1977:Q3	1.24
1977:Q4	0.76
1978:Q1	0.39
1978:Q2	0.80
1978:Q3	1.02
1978:Q4	1.01
1979:Q1	1.37
1979:Q2	1.26
1979:Q3	1.41
1979:Q4	1.45
1980:Q1	1.40
1980:Q2	0.72
1980:Q3	0.45
1980:Q4	0.68
1981:Q1	0.57
1981:Q2	0.32
1981:Q3	0.50
1981:Q4	0.07
1982:Q1	-0.28
1982:Q2	-0.51
1982:Q3	-0.89
1982:Q4	-0.71
1983:Q1	-0.51
1983:Q2	-0.60
1983:Q3	-0.51
1983:Q4	-0.30
1984:Q1	-0.02
1984:Q2	0.38
1984:Q3	0.47
1984:Q4	0.53
1985:Q1	0.63
1985:Q2	1.01
1985:Q3	1.21
1985:Q4	0.90
1986:Q1	0.83
1986:Q2	0.99
1986:Q3	0.82
1986:Q4	1.16
1987:Q1	1.35
1987:Q2	1.62
1987:Q3	1.81
1987:Q4	1.85
1988:Q1	1.82
1988:Q2	1.52
1988:Q3	1.50
1988:Q4	1.31
1989:Q1	1.01
1989:Q2	0.69
1989:Q3	0.66
1989:Q4	0.61
1990:Q1	0.67
1990:Q2	0.83
1990:Q3	0.55
1990:Q4	0.35
1991:Q1	0.12
1991:Q2	0.28
1991:Q3	0.30
1991:Q4	0.37
1992:Q1	0.90
1992:Q2	0.75
1992:Q3	0.70
1992:Q4	0.67
1993:Q1	0.32
1993:Q2	0.33
1993:Q3	0.18
1993:Q4	0.39
1994:Q1	0.36
1994:Q2	0.57
1994:Q3	0.48
1994:Q4	0.74
1995:Q1	0.49
1995:Q2	0.35
1995:Q3	0.49
1995:Q4	0.75
1996:Q1	0.99
1996:Q2	1.02
1996:Q3	1.04
1996:Q4	1.09
1997:Q1	0.57
1997:Q2	0.63
1997:Q3	0.79
1997:Q4	0.82
1998:Q1	1.17
1998:Q2	1.25
1998:Q3	1.53
1998:Q4	1.29
1999:Q1	1.56
1999:Q2	1.43
1999:Q3	1.58
1999:Q4	1.61
2000:Q1	1.80
2000:Q2	2.01
2000:Q3	1.87
2000:Q4	1.88
2001:Q1	1.66
2001:Q2	1.54
2001:Q3	1.38
2001:Q4	1.38
2002:Q1	1.77
2002:Q2	1.61
2002:Q3	1.48
2002:Q4	1.42
2003:Q1	1.42
2003:Q2	1.56
2003:Q3	1.61
2003:Q4	1.72
2004:Q1	1.61
2004:Q2	1.82
2004:Q3	1.92
2004:Q4	1.69
2005:Q1	1.70
2005:Q2	1.52
2005:Q3	1.72
2005:Q4	1.73
2006:Q1	1.99
2006:Q2	1.84
2006:Q3	1.83
2006:Q4	1.84
2007:Q1	1.42
2007:Q2	1.43
2007:Q3	1.31
2007:Q4	1.29
2008:Q1	0.97
2008:Q2	0.78
2008:Q3	0.46
2008:Q4	0.03
2009:Q1	-0.19
2009:Q2	-0.15
2009:Q3	-0.07
2009:Q4	0.21
2010:Q1	0.13
2010:Q2	0.26
2010:Q3	0.30
2010:Q4	0.25
2011:Q1	-0.03
2011:Q2	0.08
2011:Q3	0.13
2011:Q4	0.26
2012:Q1	0.52
2012:Q2	0.47
2012:Q3	0.50
2012:Q4	0.50
2013:Q1	0.69
2013:Q2	0.71
2013:Q3	0.80
2013:Q4	1.24
2014:Q1	1.16
2014:Q2	1.20
2014:Q3	1.09
2014:Q4	0.80
2015:Q1	0.71
2015:Q2	0.66
2015:Q3	0.51
2015:Q4	0.39
2016:Q1	0.46

Note: TFP is total factor productivity.

Source: John Fernald (2014), "Productivity and Potential Output before, during, and after the Great Recession," NBER Working Paper Series 20248 (Cambridge, Mass.: National Bureau of Economic Research, June).

 

 

Figure 6: U.S. LFPR for ages 25 to 54 is at the lower end of the OECD

Left panel: Female LFPR

Percent

	2007	2014
Slovenia	87.3	88.3
Sweden	87.1	88.0
Iceland	85.4	86.3
Portugal	82.7	85.8
Switzerland	81.9	85.7
Austria	81.1	84.5
Norway	84.0	84.1
Denmark	85.3	83.8
France	82.3	83.5
Finland	85.6	83.4
Germany	80.6	82.4
Spain	73.3	82.0
Netherlands	79.9	81.9
Canada	82.1	81.9
Estonia	83.4	81.8
Czech Republic	80.3	81.6
Luxembourg	74.7	80.9
Belgium	78.0	80.6
Slovak Republic	80.5	80.4
United Kingdom	77.6	80.0
Poland	75.6	79.6
New Zealand	76.6	79.3
Hungary	73.2	78.8
Israel	72.0	78.4
Australia	74.8	75.9
Greece	69.1	75.6
Japan	70.1	74.5
United States	75.4	73.9
Ireland	72.2	72.6
OECD countries	70.1	72.0
Italy	64.1	66.4
Korea	62.0	64.8
Mexico	52.6	54.8
Turkey		38.8

 

 

Right panel: Male LFPR

Percent

	2007	2014
Switzerland	95.8	95.8
Czech Republic	95.0	95.6
Japan	96.3	95.6
Luxembourg	94.9	94.9
Mexico	95.3	94.1
Slovak Republic	93.0	94.0
Sweden	92.9	93.5
France	94.2	93.2
Greece	94.6	93.1
Iceland	95.3	92.9
Germany	93.8	92.6
Spain	92.5	92.6
New Zealand	92.1	92.4
United Kingdom	91.7	92.4
Slovenia	91.3	92.3
Netherlands	93.5	92.2
Estonia	93.2	92.0
Portugal	92.9	91.6
Austria	93.7	91.5
Korea	90.5	91.3
OECD countries	92.2	91.2
Hungary	86.9	91.2
Belgium	92.5	90.7
Canada	91.1	90.5
Poland	87.9	90.5
Denmark	92.3	90.3
Australia	90.8	89.9
Turkey	88.1	89.8
Ireland	91.7	89.7
Finland	90.3	89.6
Norway	90.9	89.3
United States	90.9	88.2
Italy	91.0	87.7
Israel	83.7	86.8

Note: LFPR is labor force participation rate; OECD is Organisation for Economic Co-operation and Development.

Source: Organisation for Economic Co-operation and Development, "Short-Term Labour Market Statistics: Harmonised Unemployment Rates (HURs)," OECD.Stat.

 

 

Figure 7: Potential GDP is lower

Level of potential GDP in 2015 is 10% lower than projected in 2007

Potential GDP growth, 2005-15:
In 2007: 2.8%
Now: 2.0%

Actual and Potential GDP

CBO estimates
Billions of 2009 dollars

Period	Actual	2016 potential	2007 potential
2000	12,560	12,309	12,309
2001	12,682	12,764	12,764
2002	12,909	13,202	13,202
2003	13,271	13,593	13,593
2004	13,773	13,942	13,942
2005	14,234	14,277	14,323
2006	14,614	14,625	14,717
2007	14,874	14,960	15,127
2008	14,830	15,246	15,557
2009	14,419	15,471	15,998
2010	14,784	15,637	16,440
2011	15,021	15,793	16,879
2012	15,355	15,973	17,328
2013	15,583	16,208	17,780
2014	15,962	16,465	18,232
2015	16,349	16,716	18,686

Note: GDP is gross domestic product; CBO is Congressional Budget Office.

Source: Congressional Budget Office, Budget and Economic Outlook and Updates, "Potential GDP and Underlying Inputs," data for January 2016 and January 2007; Bureau of Economic Analysis.