What's going on?

You know how some days at work are less productive than others? Well, imagine the collective productivity of all the workers in the US economy. According to data out on Wednesday, US workers were more productive in 2016 than in the previous year. But their productivity increased at the slowest pace since 2011 � and that�s a bigger deal than it sounds!

What does this mean?

Technically, �labor productivity� is how many goods and services workers produce per hour of work. Over time, productivity tends to increase as technology improves and workers are able to do more in their work day (think: a doctor can perform multiple complicated surgeries today versus decades ago when surgery took way longer and wasn�t as effective). The problem in the US as well as other major developed economies is that, over the past decade, productivity hasn�t increased at anywhere near the rate it has in previous decades. That has led directly to the historically low economic growth that the world has been experiencing.

Why should I care?

For the markets: It will be tough for the global economy to sustainably grow faster without higher productivity growth.

One of the reasons that stock prices have done so well lately is that the global economy appears to have picked up steam in recent months. But for the pickup to be sustained over the long-term, the economy is likely going to have to figure out a way to become more productive more quickly (e.g. training workers more appropriately so that they can apply technology more effectively to manufacturing processes).

For you personally: Higher productivity increases your standard of living.

Healthcare is perhaps the best example of how higher productivity impacts your life: the improvement in surgeries helps humankind live longer. But higher productivity also leads to more short-term benefits: a company that is operating more efficiently typically makes more profit and will pass some of that onto its workers in the form of higher pay.