Despite modest economic growth, the US unemployment rate has fallen quickly. This drop can be explained with an extraordinary weakness in productivity in recent years.
Due to slowdown in in productivity in recent years, the US GDP growht and the unemployment has fallen quickly.
Commerzbank expects no change in the growth rate in the near future. In combination with population growth that has slowed to a moderate pace, low productivity growth leads to a much-reduced speed limit for the US economy. For this reason a growth rate of only 2% is sufficient to increase capacity utilisation in the economy and makes higher key rates necessary, adds Commerzbank.
