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Creating more goods and services per hour of work is the path to higher wages and rising living standards. So on that score it’s especially nice to see the U.S. economy surpassing recent expectations. On Thursday the Bureau of Labor Statistics reported: Nonfarm business sector labor productivity increased 2.4 percent in the second quarter of 2025… as output increased 3.7 percent and hours worked increased 1.3 percent. Troy Ludtka at SMBC Nikko has a bullish reaction: While other major industrialized economies are seeing either minor gains or outright declines, the US continues to see a steady acceleration in labor productivity. This is generating economic outperformance and efficiency gains on a global scale which is reflected in exceptional equity market performance. These advances also mean that the non-inflationary potential of the economy is expanding, which will help in attenuating inflationary pressures and drive real wage gains domestically. The adoption of AI across the largely services-based US economy will continue to support this economic outperformance over the
medium run. *** In Other News
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