Productivity, Employment, Real Wages, and Economic Growth

The U.S. is proud of the fact that American workers are the most productive labor force in the world. In fact, no country in the world comes close to matching the productivity of the U.S. worker. With a labor force of only 5 percent of the world total, the U.S. will produce 30 percent of global output in 2004. This world-class productivity provides American workers with the highest wages, the most stable employment, and the highest living standard in the world.

Recent evidence suggests that the labor market has improved and economic returns to American workers are increasing. The unemployment rate for July was the lowest in 33 months. The July rate of 5.5 percent was significantly better than the 6.2 percent of a year ago. Additionally, the median number of weeks unemployed is the lowest since 2001, and is two weeks shorter than last year. This finding indicates that unemployed workers are finding it easier to find new jobs.

The past 34 quarters show growth in real wages and real wages in the present quarter are increasing at the highest rate in three years. Real wages, a wage measure adjusted for inflation, has increased by 5 percent since 2002.

When record low interest rates are added to the picture, the economy is expected to continue its growth providing even more jobs for the American worker. When considered together, improved employment, increased real wages, and continued economic growth, add up to a Labor Day 2004 that is a real celebration for the U.S. worker.

(Updated October, 2004)