It makes no sense to 'nowcast' productivity growth: Average absolute forecast error from projecting next 5 years growth based on past growth
| Average absolute forecast error | Net total economy productivity | Nonfarm business sector labor productivity |
|---|---|---|
| 1 Year | 1.12% | 1.25% |
| 3 Years | 0.74% | 0.96% |
| 5 Years | 0.68% | 0.86% |
| 10 Years | 0.69% | 0.87% |
| 20 Years | 0.74% | 0.88% |
| 40 Years | 0.59% | 0.76% |
Note: Forecasts follow methods of Mericle (2016). Productivity growth average of last x years is compared with actual productivity performance of following 5 years. The absolute value of the average error is compared for different values of x. Data used are from the BLS total economy productivity series as well as BLS measures of productivity in the nonfarm business sector.
Source: Reproduced from Furman (2015)