AEI’s Mark Perry talks about American Productivity:
What’s even more striking though is that the U.S. economy was able to produce $13.38 trillion of real output last quarter with only 139 million employees, compared to the more than 146 million Americans who were working in the fourth quarter of 2007 to produce slightly less output, as AEI’s Alex Pollock recently observed. The chart above shows that real output in the United States is now 0.14 percent higher than three years ago, but is being produced with almost 5 percent, or 7.2 million, fewer workers!
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Of course, there are limits to efficiency gains, and as we soon reach those limits, hiring will pick up and the jobless rate will decline. But for now we can consider it a testament to the resiliency and efficiency of the U.S. economy, employing the world’s most productive workers, that we were able to amazingly produce a record level of output in 2010 with 7 million fewer workers than in took three years ago to produce that same amount.
That’s the key. Given the fact that the housing market — at least in the Charlottesville area — is showing signs of bottoming out, and that Americans are in Year 3 of a five-year paydown on personal credit, one can see how 2011 may not be a stellar year… but when 2012 gets here, the economy is poised to boom.
…which is where the problem lies.
The same problems that created the housing boom are still embedded in the credit system today. Speculation is the kicker… that and whether the American consumer has learned the lesson of cheap credit, something most economies would have taken decades from which to recover.
Thus the power of the American consumer. We have more disposable income than any other nation on earth. We spend (and recover) from economic crises that in years past would have swamped other nations — the British Empire, Germany, Russia, etc. Whether we have the education to take the lessons of the Great Recession to heart is another question altogether…
Fear the boom.