WASHINGTON — American workers were less efficient in the July-September quarter, pushing down productivity for the first time since late 2015.
With economic growth slowing, in part because the stimulus from federal tax cuts is fading, many economists worry that worker productivity will follow suit. Most economists also believe that the U.S. government’s trade war with China has discouraged businesses from investing more in productivity-enhancing tools such as computers and machinery, offsetting the benefits from the 2017 corporate tax cut.
The Labor Department said Wednesday that productivity, a measure of economic output for each hour worked, fell 0.3% in the third quarter. The drop comes after two quarters of healthy gains.
Still, productivity has increased just 1.4% in the past year, about two-thirds of its long-run average.
Weak productivity growth has been a hallmark of the current economic expansion, now in its 11th year. It is a key reason the overall economy has expanded more slowly than in previous expansions.