Experts agree that the wellspring of a healthy economy is productivity growth. It's what fueled the economic boom of the late 1990s. Measured in output per hours worked, U.S. productivity grew at a galloping 2.6% annualized rate from 1995 to 2000--a sudden jump up from the 1.4% growth rates that had prevailed for more than 20 years prior. One of the liveliest economic debates now is whether productivity can be sustained at that growth level going forward.
So far, despite the recession that began in March 2001, productivity is holding up surprisingly well. Buoyed by a 5.2% jump in last year's fourth quarter, nonfarm productivity for all of 2001 advanced by 1.9%. That's down from 3.3% in 2000, but still remarkable, given that productivity usually declines during recessions.