Thursday, May 06, 2004


The latest productivity readings (for the first quarter) look very good. When economists speak of "the fundamentals", this one has to be very near the top. We also enjoy a system where the fruits of these advances are quickly brought to market and the benefits disseminated to workers, investors and consumers. This is on top of the underlying good news that we live in a world where creativity and risk-taking are on the move.

There are always two "jokers" involved when one attempts to connect good news like this with rosy forecasts. They are the international scene and the oddball policies that politicians might come up.

It is, therefore, all the more remarkable that economic progress continues. The underlying economy is much stronger than the data show. We get over 5% of annual productivity growth in a system that has to discount the two jokers.