Yesterday brought more concerning news on the state of the American economy. Nonfarm business sector labor productivity decreased 0.8 percent in the first quarter of 2025, under the Trump Administration.

The first time in three years that the US has seen a decline.

Coming out of the pandemic, worker productivity and the steady increases that occurred were a hallmark of an economy on the rebound.

Now, it’s all sliding back.

Concerning for workers is that while their hours of work have increased by 0.6 percent, their output has dropped by 0.3 percent. They are working longer – and harder – without the economy seeing the benefit.

Furthermore, for businesses, their input costs increased.

Under Trump, employers are paying more to do business, but are producing less, which will ultimately affect their bottom line.

Why is productivity a crucial economic measure?

It is essential for economic growth.

In a capitalist society, productivity is the driving force that leads to increased living standards, bolstered by both business and individual success.

Productivity is the business cycle’s motor. As output per unit of input increases, this, in turn, makes the business stronger, which enables higher wages and increased employment opportunities, allowing everyday Americans to have the income to purchase the goods and services they need.

That then starts the cycle again.

Productivity is viewed by many economists as the key indicator of an economy’s health.

Which means dropping productivity forecasts negative impacts to come.

President Trump has often touted his policies to date as working to “Make America Great Again,” and yet, in direct opposition to the President’s claims, the stream of economic data clearly shows that America is regressing and falling behind at rates not seen in years.

Unfortunately, for the American worker and their families, all this false rhetoric only means a higher cost of living, something that many cannot afford.