America’s lost oomph

From the Economist.com:

BACK in the mid-1990s, America’s economic prospects suddenly brightened.

Productivity soared.  Immigrants and foreign capital flocked to take advantage of what was quickly dubbed the “New Economy”.

The jobless rate fell to 4%, yet inflation remained low...

Sadly, the New Economy is no more.

The recovery from the recession of 2008-09 has been the weakest of the post-war era, and evidence is mounting that America’s potential growth rate has plummeted.

Its two big determinants, the supply of workers and the rise in their productivity, have both fallen short.

Performance in the past year has been particularly feeble: America’s labour force has not grown at all and output per hour worked has fallen.

The IMF recently cut its estimate of the country’s potential rate of growth to 2%. Other economists put it as low as 1.75%...
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Link: http://www.economist.com/news/leaders/21607809-countrys-potential-growth-rate-barely-half-what-it-was-two-decades-ago-heres-how-raise?