Whatever economic shock we feel over the imposition of more tariffs will be just the latest one, as anyone keeping a casual eye on the news over the last few years knows. We’ve sustained almost endless shocks, including a pandemic, shutdowns, high inflation, government layoffs, immigrant infusions and deportations, federal-fund claw-backs, and years of on-and-off tariff-induced trade wars.

Given all the exhausting disruptions happening worldwide, wouldn’t it be wonderful if we discovered that Americans can now produce more with less? Can people working fewer hours and earning more also produce more goods and services?

Believe it or not, there are some signs that this is happening.

Most Americans know that real GDP growth is a vital measure of prosperity; it is the value of new goods and services being produced in our economy. The typical worker and consumer know little about what determines real GDP growth, and about the details found in the Department of Commerce Bureau of Economic Analysis report each quarter. It’s far more essential to know how we are personally doing and what might lift our own families’ prosperity.

That said, the typical person feels better knowing that BEA’s first estimate for 2025’s second quarter showed real GDP growth forging ahead at 3%.

Whether we see positive or negative GDP growth depends on the answer to two simple questions: Are people working more or less, and when they work, are they producing more?

We start to see one factor that’s made GDP growth return with a kick. The 2020 COVID shutdowns disrupted how America works. They forced some workers to find new ways to provide for themselves and their families. As a result, the share of the adult population able to participate in the 9-to-5 labor market fell and remained at a lower level. Real GDP growth went negative, and we got a deep but short recession.

However, we also learned something: It costs a lot less to work at home than to commute and work in a city office. Productivity went up. Then, many people decided to start home-based businesses instead. There was an explosion of start-ups that has continued. While all this was going on, virtual meetings and then artificial intelligence came on in spades.

The current picture shows rising productivity that compensates for subdued labor force participation and lower labor-force growth. In the second quarter, labor productivity was up 2.4%. Employment grew 1%, and over the last year, hourly earnings rose 3.9%.

The result of external shocks, technical change and the government’s response, including inflation and trade wars, is that the nation has learned to produce more with less. That promises good things for future prosperity, especially as more workers adjust to this new normal and take advantage of the new world of work.

While we must remember that every day is a new day for potentially disruptive Washington policy changes, let the good times roll.

Bruce Yandle is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of Clemson University’s College of Business & Behavioral Science./ InsideSources