The Federal Reserve Bank of Cleveland published an Economic Commentary assessing whether the United States has moved onto a higher productivity growth path, with a model estimate indicating a 41% chance the economy has entered a period of higher trend productivity growth based on data through November 2024. The estimated probability had been below 5% until newly released and revised data on labor productivity, consumption and real wages. While the higher probability is consistent with forecasts of sustained technological progress, the authors caution that some recent gains could reflect supply-chain normalization and other transitory factors; the model still assigns a 59% probability that trend growth remains low and, despite a strong historical track record, would likely need several more quarters of data to reach a clearer conclusion.
Federal Reserve Bank of Cleveland 2025-01-15
Federal Reserve Bank of Cleveland research puts a 41% probability on a shift to higher US productivity growth
The Federal Reserve Bank of Cleveland's Economic Commentary suggests a 41% probability that the U.S. has entered a higher productivity growth phase, up from below 5% due to new data on labor productivity, consumption, and real wages. However, the model still indicates a 59% chance that trend growth remains low, with recent gains possibly reflecting temporary factors like supply-chain normalization. Further data over several quarters is needed for a definitive conclusion.