Potential growth still held back by productivity slump

If sustained (admittedly a big if), the recent surge in labour force growth would mean that the US economy’s potential growth rate is arguably higher than most economists currently believe. Unfortunately, unless we see a corresponding rebound in labour productivity growth, which is currently languishing at less than 1% per year, potential GDP growth will still be no more than 2%, even if annual labour force growth continues at 1% plus.