U.S. economic growth is anemic, and the country needs to do something about it, quickly. This was one of the central themes of the third presidential debate. “China is growing at 7 percent. And that for them is a catastrophically low number. We are growing—our last report came out, and it is right around the 1 percent level,” Trump said Wednesday night. “Look, our country is stagnant.”
Trump is right that U.S. growth has not been very impressive of late, especially when compared to rates of the past. Though the United States gross domestic product (GDP) grew at a rate of more than 3 percent for much of the 1980s and 1990s, the rate has slowed significantly since the recession, according to the Bureau of Economic Analysis. In the second quarter of this year, for instance, GDP increased at a rate of just 1.4 percent. After a recession, an economy should come roaring back, but this time around, it hasn’t, and that’s left many concerned about the state of the economy. GDP growth, economists say, helps raise wages and living standards, and increases the size of the entire economic pie—making it possible for more people to have a bigger share.
But economists aren’t quite sure why the pie—the country’s gross domestic product—has stopped growing as quickly as it used to. GDP is the total value of goods and services produced in a country during a year. The more workers there are in the labor force and the more each individual produces, the more a country’s economy grows. But even as the U.S. economy keeps adding jobs, growth has remained sluggish. And productivity is barely budging, too. Output per hour has expanded at a rate of just 1.3 percent per year, the worst run of productivity growth since the recessions of the 1970s.