SAN FRANCISCO (Reuters) - The recent sluggishness in U.S. productivity began well before the recession and will likely place a speed limit on future U.S. economic growth, a paper published Monday by the Federal Reserve Bank of San Francisco said.
A surge in productivity by American workers from 1995 to 2003 was followed by a marked deceleration, the research paper said, settling recently at around 1.5 percent a year.
This more lethargic pattern could translate to annual gross domestic product growth of 2.1 percent, wrote San Francisco Fed senior research advisor John Fernald and research associate Bing Wang. That’s well under historic norms for the United States.
Productivity had moderated especially in industries that produce information technology or consume it intensively, they wrote, and the future of innovation-driven productivity gains was uncertain.
Still, they wrote, “it appears to mark a pause in - if not the end of - exceptional productivity growth associated with information technology.”
Reporting by Ann Saphir; Editing by Bernadette Baum