What is going on with productivity? (from my email)

Various web sources, but none of this seems controversial:

1. US GDP is now higher, in fact a fair bit higher, then when the pandemic began.

2. US labor force participation is about 1.5% lower than when the pandemic began.

Was there really slack to the tune of a few million people in Jan of 2020?

Has inflation really changed enough to make the GDP numbers misleading?

Has total factor productivity improved that much in that time, under those stresses?

Or is this all a sign that the structure of the economy is more stratified than we think – that there are millions of people in more-or-less filler jobs who can be cast out and the economy just keeps on running along?   Yes, there are all sorts of reports of labor shortages, and all manner of supply chain hiccups which seem to often be associated with off shoring, but general activity is still high.   (Or is it?  Are the numbers reporting “vapor GDP?” – or are the inflation adjustments really out of whack so real GDP is not what we think it is?)

That is all from Bryan Willman.


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