There's some extremely good economic news today. Productivity rose in the first quarter at the rate of 3.6% per year. That brings productivity growth over the last year to the highest in about a decade. Productivity is a measure of how much labor is needed to produce one unit of output. As productivity rises (like it is), it becomes less expensive for companies to produce their products. That allows higher profits, higher wages and less inflation. It's a win, win, win for the economy.
The key to the current rise in productivity, however, is the tax cuts passed at the end of 2017. These tax cuts gave businesses additional funds which they have used to make investments that have streamlined production and resulted in the productivity gains. The increased investment should lead to even more investment as higher profits get used by the companies. It is what is often called a "virtuous cycle".
The media is unlikely to give this story much coverage because it shows the wisdom of the Trump tax cuts and the positive results they have brought for all Americans. It's a story everyone needs to hear, though.
The key to the current rise in productivity, however, is the tax cuts passed at the end of 2017. These tax cuts gave businesses additional funds which they have used to make investments that have streamlined production and resulted in the productivity gains. The increased investment should lead to even more investment as higher profits get used by the companies. It is what is often called a "virtuous cycle".
The media is unlikely to give this story much coverage because it shows the wisdom of the Trump tax cuts and the positive results they have brought for all Americans. It's a story everyone needs to hear, though.
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