Productivity Gains

Definition

The ability of society to produce more goods and services with the same level of resources, increasing incomes and leisure time.

2024 TFP Growth

1.3% increase following a 1.4% increase in 2023.

Economic Metric

Total Factor Productivity (TFP), which measures the ratio of gross output to combined inputs.

Primary Drivers

Generative AI, Industrial Robotics, Organizational Restructuring, and Education.

Q2 2025 Growth Rate

3.3% increase in the nonfarm business sector.

Historical Precedents

Electrification, computing, and the internet.

2023-12-31

2024-04-04

2024-04-24

2024-12-31

2025-09-04

These productivity gains come from making existing tasks faster to complete. Historically, though, transformative productivity improvements—from electrification, computing, or the internet—came not from speeding up old tasks, but from fundamentally reorganizing production. In futures like these, AI not only makes implementing features faster, but companies restructure meetings and code review to validate and ship those features faster, whether using AI or through other means. [...] 2. Hulten’s theorem states that in a competitive equilibrium without distortions, the contribution to total factor productivity of micro-level productivity gains are proportional to that production factor’s Domar weight to a first order approximation. A factor’s Domar weight is the ratio of its value of gross output to GDP. In the task-based model presented by Acemoglu (2024) a task’s Domar weight for labor-intensive tasks is equal to that task’s share of the wage bill multiplied by the labor [...] Restructuring of organizations: Historically, the largest productivity gains for individual firms have followed from restructuring business operations to adopt new technologies. Our model can help predict the effects of such a restructuring, but it cannot predict how companies might decide to restructure, or how quickly this process might happen.

Other innovations not directly related to traditional technology can impact productivity growth. For example, efficiency gains from new production processes and organizational structures for companies through increased entrepreneurship, competition, or trade can increase productivity. In economic theory, the economy is able to reach its full productive capacity when all resources are allocated most efficiently. Assumptions of the efficient allocation of resources include perfect competition and [...] December 18, 2018, p. 25, .") As productivity increases, society can produce more goods and services with the same level of resources, which, all else equal, increases incomes and access to goods and services, including access to additional leisure time. [...] productivity. More education and training can, for example, allow workers to more efficiently engage with the tools and technology they use to produce goods and services. A recent study suggests that policies aimed at raising educational performance could result in long-term productivity gains across economies, including in the United States.14

Productivity increases 3.3% in Q2 2025; unit labor costs increase 1.0% (annual rates)") 09/04/2025 Productivity increased 3.3 percent in the nonfarm business sector in the second quarter of 2025; unit labor costs increased 1.0 percent (seasonally adjusted annual rates). In manufacturing, productivity increased 2.5 percent and unit labor costs increased 2.0 percent. HTML | PDF | RSS | Charts Productivity decreases in 56 of 91 manufacturing and mining industries in 2024 04/24/2025 [...] HTML | PDF | RSS | Charts Total factor productivity increases 1.3% in 2024, following a 1.4% increase in 2023 03/21/2025 Total factor productivity increased 1.3 percent in the private nonfarm business sector in 2024 as output increased 2.9 percent and combined inputs increased 1.6 percent. HTML | PDF | RSS read more » Next Releases Productivity and Costs: Third Quarter 2025, Preliminary is scheduled to be released on January 8, 2026 at 8:30 A.M. Eastern Time. read more » Publications [...] Labor productivity increased in 48 states and the District of Columbia in 2024. Output increased in all 50 states and the District of Columbia and hours worked increased in 29 states and the District. HTML | PDF | RSS | Charts Productivity increases in 20 of 31 selected service-providing industries in 2024 06/26/2025

### 5. Prioritize and delegate less crucial tasks. Your focus should go to the most crucial tasks on your to-do list first, so consider your responsibilities and rate them by importance. If possible, set aside low-priority items. According to Kathleen Kobel, productivity business coach and founder of Smart Business Mom, creating a plan to outsource or delegate those tasks will allow you to spend more time on duties that add value to your position and the company. [...] According to Jenny Gauld, interior designer for office furniture and accessory retailer Turnstone, color can significantly impact your mood and productivity. For example, blue can impart a calming feeling and help you focus, while red is ideal for work requiring accuracy and attention to detail. Plants can also help people focus: A study by the American Society for Horticultural Science found that workers exposed to plants in their workspace reported feeling less stressed and more productive. [...] Although you may want to skip lunch to eat a salad at your desk while you work, research shows a boost in employee productivity and morale when employees share workplace meals. Eating with your co-workers can help you build social relationships, bond with your team and grow your network. Additionally, it forces you to take a much-needed break to relax and unplug from work. ### 20. Practice presence and meditation.