Productivity climbs — without hiring to match

Marketplace

American Public Media

News, Business

4.6 • 8K Ratings

🗓️ 8 January 2026

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

Labor economists will tell ya, productivity growth leads to more hiring. The idea is, once a company is operating more efficiently, they’ll try expanding, which usually comes with new jobs. But in this frustrating and bizarre economy, data show major productivity gains and a stagnant labor market … coexisting? Also in this episode: New York City expands a free child care program, one reporter tries to do the job(s) of the federal government, and economists expect a less-grim December jobs report.

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Transcript

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0:00.0	Hey, you. Yes, yes, you. How productive were you today? I'm asking because the economy wants to know.
0:12.7	From American public media, this is Marketplace.
0:28.5	Music In Los Angeles, I'm Kyle. Today, this one is the 8th of January.
0:31.7	Good as always to have you along, everybody.
0:34.4	Among the mysteries at large in this economy of late, among them, why do consumers keep
0:39.6	spending when we are so cranky? Why haven't tariffs taken as big a bite as we expected? We talked
0:44.9	about that one yesterday. There is also this. How can the economy be growing at the decent
0:50.9	clip that it is when the labor market is to be kind stalled. Well, we got an answer to that
0:58.5	last one today. The labor department's shutdown delayed report on worker productivity for the third
1:04.0	quarter. It grew at the fastest pace in two years, 4.9 percent annualized. Marketplace's Nova Sopho makes it make sense.
1:13.1	The big jump in productivity in the third quarter is not a surprise to Gerald Cohen,
1:17.7	chief economist at UNC Chapel Hill.
1:20.3	We knew that GDP was quite strong in the third quarter, and employment and in particular
1:27.4	hours worked was quite weak.
1:29.6	The gap in between is filled by strong productivity. Inflation and new tariffs are making
1:35.6	businesses reluctant to hire and they're getting more out of each worker they already have.
1:40.8	But Cohen, whose research focuses on productivity, says it remains to be seen if the gains so
1:46.2	far are a long-term trend. If we saw strong labor force growth and strong productivity growth,
1:53.9	I would feel better about this productivity number and say, oh, yeah, maybe this is something.
1:59.9	But plenty of analysts on Wall Street today did think it's something.
2:04.7	We could be seeing at least the initial stages of some payoff,
2:09.7	particular of the AI-driven automation.
	...

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