Today numbers on productivity are great, 6.3% year-adjusted quarterly growth (quite inconvenient measure, they better track just Y/Y):
Historically speaking, productivity is better when the times are getting worse. This is quite understandable, when people worry they tend to work more and stay overtime to prove themselves more valuable, they can’t find a better paying job and don’t ask for a rise.
This is one of the early indication of the coming trend: we are forced to become (again) a nation of hard-working savers as opposed to lazy spenders we’ve being the last 3 years. The trade balance will improve, consumption drop, the debts will either default or be paid, but no new debts will be made. Essentially this is how economy fixes itself, but it will take time and will be painful.