While media and financial critics are busy parsing monthly inflation and unemployment reports, most are missing an even more important economic barometer: productivity. John Carney isn't missing it. Breitbart's economics and finance editor says it's time to pay attention to the productivity boom, and what is behind it. He notes that U.S. economic productivity rose by an annualized rate of 4.1 percent and 4.9 percent in the first two full quarters of President Trump's second term last year. That marks the best two-quarter stretch since Trump's first term. It is something the president may want to include in his election year economic barnstorming tour.
Why is productivity so important as an economic indicator? "If you can grow productivity, you can grow your economy and you don't have to worry so much about inflation," Carney tells KTRH. "You can grow through innovation and investment, rather than through the blunt force of growing the number of people who are working at any time."
Carney notes that this turnaround in productivity started in 2024, but the drivers behind it are "Trumpian." "One of the things that started it was the tightening of the labor market, which accelerated under Trump...he made it very clear that we were going to have a much more restrictive immigration policy," says Carney. "By slowing the pace of the population growth, that made businesses double down on this concept of growing through productivity rather than growing through your payrolls."
Carney expects this productivity boom to grow stronger this year as the provisions of the One Big Beautiful Bill take effect. "With our lower population growth, things that seemed like signals of weakness in the past are actually now signs of strength---we only need to grow about 30,000 jobs a month to keep the unemployment rate from going up," he says. "And the way we're growing the economy is through innovation, investment, and improved productivity."