Given the recent spell of gloom seemingly settling over investors’ psyche in the last few months—due to disappointing inflation and economic growth data, fears about high valuations, the Fed making a policy mistake, a flattening yield curve, and the potential for the next recession being sooner than anticipated, etc.—we think it is worth taking a further look at one aspect of the economy where there could be some room for optimism, productivity. Several weeks ago we wrote about a number of companies globally and across most industries that are having tremendous success at leveraging new innovative technology, network effebcts, branding power, and informational asymmetries to increase productivity and pricing, and in so doing, widening the moat between themselves and their competitors. In this week’s Economics Weekly, we return to our discussion on productivity and our belief that the next great productivity wave may already be underway and those who continue to look at recent weak productivity figures as an accurate depiction of what to expect in the coming years could be in for a surprise.
For a copy of this report or to subscribe to the Economics Weekly or Economic Indicators reports, please contact your William Blair representative.
Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.