SE Valley Times

The U.S. Chamber of Commerce has released an economic outlook for 2025, highlighting productivity as a key driver of growth. According to Curtis Dubay, Chief Economist at the Chamber, the economy is expected to grow at a rate above 3%, surpassing the growth seen in 2023 and 2024.

Dubay noted that "barring an unforeseeable event," this growth will create new opportunities for American workers and businesses. He emphasized that sustained economic expansion is crucial for increased investment and wages.

As 2024 comes to a close, the U.S. economy has shown strong performance with a growth rate of 3% in the second quarter and 2.8% in the third quarter. The fourth quarter is also projected to exceed 3%. This places the U.S. ahead of many other developed countries, which are experiencing slower growth rates.

Dubay explained that consumer spending has been a significant factor in recent economic growth. Wages have risen faster than inflation since mid-2023, allowing consumers to maintain high spending levels despite ongoing inflationary pressures.

The U.S. faces a worker shortage due to an aging population and declining labor force participation rates over the past two decades. This shortage has led to more job openings than available workers—a situation not seen before COVID-19.

Looking ahead to 2025, Dubay anticipates that productivity gains will be essential for continued economic progress. He stated that "productivity–producing more goods and services with the same amount of labor and capital–is the glue that holds together the virtuous cycle of economic progress."

Factors contributing to rising productivity include reskilling during the pandemic, legal immigration, automation, and mechanization. Additionally, artificial intelligence (AI) is expected to further enhance productivity by making current workers more efficient.

Christine Lagarde from the European Central Bank highlighted differences between regions: “Productivity in the European economic zone has increased 0.6% since the end of COVID. It has increased 6% in the U.S.”

Dubay concluded that AI integration into business processes could lead to even greater productivity gains next year, potentially boosting growth while allowing businesses to maintain high wages.

Curtis Dubay leads research on both U.S. and global economies as Chief Economist at the Economic Policy Division of the U.S. Chamber of Commerce.