High growth and low unemployment carry the risk of inflation. A strong dollar is good for importers, not so good for exporters. High factory orders can entail swollen inventories later. The exception is productivity increases. In a stagnant economy, one person's benefit tends to come at another's expense.
Productivity makes the whole pie bigger.
And the April to June increase was not a quarterly fluke. Productivity is up 5.l percent over the last 12 months. The last time productivity increases were that high was 1983, when the economy was coming out of a recession. These increases come on top of eight years of continuous expansion. The productivity figures are an excellent reason for the Fed to leave interest rates alone when it meets Aug. 22.