A year ago, economists were carefully drawing comparisons between the current American economy and the mid-1990s, when a surprise burst of productivity growth allowed the economy to run hot without igniting inflation. They were hopeful but hedging their bets.
They may be done hedging.
New data released Thursday by the Bureau of Labor Statistics showed nonfarm business productivity rising at a 2.8 percent annualized rate in the fourth quarter of 2025, well above expectations. More significantly, revisions to prior quarters painted a picture of an economy that has been more efficient for longer than anyone realized. The third quarter’s…
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