Others at BlackRock have looked at the productivity slowdown, exploring cyclical and structural reasons for the “missing” gains. Measurement error continues to be the leading culprit.
The way we capture formal productivity data hasn't kept up with modern ways of doing business. As a result, I believe economists underestimate productivity increases. Think about it: Most of us walk around with more computing power in our pockets and hand bags than the Apollo astronauts had at their disposal on the lunar voyages. Smartphones and related technology make everyone more productive.
As U.S. businesses and consumers continue to adopt new technologies at the fastest rate since the advent of the television, the result is ever-increasing productivity. In the app-economy, productivity gains are everywhere -- except in the official data. Let's hope that changes soon.
Barry Ritholtz started the Big Picture blog in 2003 and is the founder of Ritholtz Wealth Management, an asset management and financial planning firm.