US worker productivity rose 3 percent in the third quarter, the best in three years, and labor costs fell for the second time in a row. This increased productivity in the second quarter, which rose by 1.5 percent, significantly higher than the first quarter, which rose only 0.1 percent, and GDP growth at an annual rate of 3.3 percent. Higher productivity may be an indicator of improved living standards for Americans, especially as the biggest challenge facing US economic growth is raising production during working hours, the Associated Press reported.
Productivity fell by 0.1 percent in 2016 for the first time in 34 years, rising again this year. Higher productivity allows companies to raise their employees’ salaries without causing a rise in inflation. The US economy now benefits from significant global growth, an active labor market that supports consumer spending, and a devaluation of the dollar against major currencies, making US goods in foreign markets less expensive and more competitive. President Donald Trump has on several occasions promised to reform and streamline the tax system and reduce taxes on individuals and businesses as part of the administration’s effort to push the economy’s growth rate steady to 3 percent.