Monthly outlook

Our investment and economic outlook, May 2024

May 16, 2024

A chart shows the contribution of technology to the trend rate of U.S. productivity growth over the last 130 years. The chart also breaks technology's contribution to productivity changes into three drivers—augmentation, efficiency, and transformation—that have tended to move in waves. Efficiency and transformation have played much bigger roles than augmentation. One of the largest spikes in productivity over the full period accompanied the widespread diffusion of electricity as a general-purpose technology (GPT) in the 1920s. At its peak, electricity lifted the trend rate of U.S productivity growth rose by about 0.8 percentage point. The biggest productivity boom owed to World War II—when the peak increase in the trend rate of U.S productivity growth was more than 1 percentage point—while another, electricity-sized surge in productivity owed to automation in the wake of the war. A much smaller rise in productivity in the 1980s and '90s reflected the diffusion of information and communication technologies. Since roughly 2010, however, a lack of GPT and automation has been dragging down the trend rate of U.S productivity growth by amounts approaching –0.8 percentage point.
Vanguard Information and Insights

Get Vanguard news, insights, and timely analysis on the market, delivered straight to your inbox.

Read our privacy policy to learn about how we keep personal information private.

* Indicates a required field

Vanguard Information and Insights

Thank you for subscribing to Economics & markets.

You'll be notified when new content is published, but will only ever receive one email a day from Vanguard Insights.

Vanguard logo

Vanguard is the trusted name in investing. Since our founding in 1975, we've put investors first.