Australian Economy

Without productivity growth, living standards won’t grow

Leith van Onselen
Thursday 19 February 2026
Advertisement

I was interviewed via email earlier this week by Harrison Christian, a senior reporter at News.com.au, asking why the US economy is performing so much better than Australia’s. In particular:

  • US real GDP growth is 4.4%, compared with Australia’s 2.1%.
  • US CPI inflation is 2.4% compared with Australia’s 3.8%.
  • The US is still cutting interest rates, while Australia is hiking.
  • The only metric where Australia is ahead is unemployment. Ours was 4.1% in December versus 4.3% in the USA.

My explanation for why the US economy is outperforming Australia’s comes down to productivity.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
Twitter Share
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.