More Evidence Of A New Economy

Evidence is mounting that productivity growth is returning to the level of the golden 1950s and 1960s. Recent government data show productivity growing about 2% for the past two years, twice the rate of the past two decades. If sustained, the long-term, U.S. noninflationary growth rate would be closer to 3 1/2% than 2 1/2%, with all that implies for wages, profits, and unemployment. The stock market is already rejoicing. On the same day the Bureau of Labor Statistics released its numbers, the Standard & Poor's 500-stock index and Dow Jones industrial average hit record highs.

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