Labor productivity growth since the Great Recession

February 24, 2017

From the fourth quarter of 2007 to the second quarter of 2009, the U.S. economy experienced its worst recession since the Great Depression of the 1930s, with nonfarm business output declining by $753 billion and some 8.1 million jobs lost. As a result, this most recent economic downturn is sometimes called the Great Recession. Although the economy has been expanding since the Great Recession ended, productivity growth has been relatively slow compared with other periods since 1947. From the fourth quarter of 2007 to the third quarter of 2016, labor productivity grew at an average annual rate of 1.1 percent, which is considerably lower than the average growth rate from 1947 to 2007 (2.3 percent) or the average rate from 2001 to 2007 (2.7 percent).

Comparing labor productivity growth since the Great Recession with past trends, fourth quarter 2007 to third quarter 2016 (2009 = 100)
Quarter Hypothetical growth rate based on 2001–07 rate Hypothetical growth rate based on 1947–2007 rate Actual labor productivity growth rate

Q4 2007

97.3 97.3 97.3

Q1 2008

98.0 97.9 96.3

Q2 2008

98.8 98.5 97.2

Q3 2008

99.5 99.1 97.5

Q4 2008

100.3 99.7 96.9

Q1 2009

101.0 100.3 97.6

Q2 2009

101.8 100.9 99.5

Q3 2009

102.5 101.5 100.9

Q4 2009

103.2 102.1 102.1

Q1 2010

104.0 102.8 102.6

Q2 2010

104.7 103.4 103.0

Q3 2010

105.5 104.0 103.5

Q4 2010

106.2 104.6 103.9

Q1 2011

107.0 105.2 103.1

Q2 2011

107.7 105.8 103.4

Q3 2011

108.4 106.4 103.2

Q4 2011

109.2 107.0 104.0

Q1 2012

109.9 107.6 104.1

Q2 2012

110.7 108.2 104.7

Q3 2012

111.4 108.8 104.5

Q4 2012

112.2 109.4 104.0

Q1 2013

112.9 110.1 104.3

Q2 2013

113.7 110.7 104.1

Q3 2013

114.4 111.3 104.6

Q4 2013

115.1 111.9 105.6

Q1 2014

115.9 112.5 104.7

Q2 2014

116.6 113.1 105.2

Q3 2014

117.4 113.7 106.3

Q4 2014

118.1 114.3 105.9

Q1 2015

118.9 114.9 106.1

Q2 2015

119.6 115.5 106.4

Q3 2015

120.4 116.1 107.0

Q4 2015

121.1 116.7 106.3

Q1 2016

121.8 117.4 106.2

Q2 2016

122.6 118.0 106.1

Q3 2016

123.3 118.6 106.9

Through most of the Great Recession, labor productivity growth lagged behind historical growth rates. However, coming out of the recession and into the early quarters of the current expansion, productivity growth reached above-average gains. In the fourth quarter of 2009, productivity growth actually caught up to the long-term historical trend, although it was still slightly behind the trend from the previous business cycle. After 2010, productivity growth slowed and remained substantially below that of earlier periods.

These data are from the Labor Productivity and Costs program. For more information, see the Beyond the Numbers article “Below trend: the U.S. productivity slowdown since the Great Recession” by Shawn Sprague. Labor productivity is a measure of economic performance that compares output, or the amount of goods and services produced, with the number of hours worked to produce those goods and services. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked for all persons, including employees, proprietors, and unpaid family workers.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Labor productivity growth since the Great Recession on the Internet at https://www.bls.gov/opub/ted/2017/labor-productivity-growth-since-the-great-recession.htm (visited November 21, 2017).

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