In analyses of the sources of economic growth, a common statistic reported about the U.S. economy is

Question:

In analyses of the sources of economic growth, a common statistic reported about the U.S. economy is labor productivity. Defined as output per hour of work, labor productivity is a simple measure of how much a typical worker can produce given the amount of capital in the economy and the state of technological progress. From 1973 to 1993, the growth of labor productivity slowed in the United States. Figure shows U.S. productivity growth for different periods since 1959. The figure shows that productivity growth was extremely high during the 1960s. It slowed a bit in the late 1960s, and then slowed dramatically after the oil shocks in the 1970s. In recent years, productivity growth has increased, reaching 2.5 percent from 1994 to 2007.
As the figure shows, U.S. productivity growth did climb in the last half of the 1990s. Some observers believe the computer and Internet revolution are responsible for the increase in productivity growth. Skeptics wonder, however, whether this increase in productivity growth is truly permanent or just temporary. Higher investment in computer technology began in the mid-1980s, but until recently there was little sign of increased productivity growth. Had the investment in information technology finally paid off? And would it continue?
Robert J. Gordon of Northwestern University used growth accounting methods to shed light on this issue. After making adjustments for the low unemployment rate and high GDP growth rate in the late 1990s, he found there had been increases in technological progress. In earlier work, Gordon had found these increases were largely confined to the durable goods manufacturing industry, including the production of computers themselves.

Because the increase in technological progress was confined to a relatively small portion of the economy, Gordon was originally skeptical that we were now operating in a new economy with permanently higher productivity growth. However, in subsequent studies he found that productivity growth had spread to other sectors of the economy, such as retail sales and financial institutions.