The End of American Hypergrowth

For two centuries, the US economy grew by adding workers. That’s over. The $2tn already lost is nothing compared to what comes next.

The American economic miracle rested on a simple formula: more workers, more output, more prosperity. From the early 19th century through the late 20th, the US economy expanded from 18 per cent of world GDP to 30 per cent by systematically expanding its labour force faster than competitors.

That era has ended.

Three demographic forces that powered two centuries of growth have simultaneously reversed. Women’s labour force participation plateaued at 61 per cent in 1997 and has drifted to 57.2 per cent as of October 2025. Male participation has collapsed from 83 per cent in 1950 to 68.4 per cent—15 percentage points representing roughly 11m missing workers. Life expectancy gains have stalled while the population ages rapidly. Immigration has been restricted precisely when demographic need is greatest.

According to research published this month by Stefania Albanesi at the Federal Reserve Bank of Minneapolis, just the stalling of female participation has already cost the US economy approximately $2tn in foregone output since 1993. That figure is trivial compared to what’s coming.

The research reveals what economists missed for decades: American economic dominance wasn’t primarily about superior institutions, better policy, or exceptional innovation. It was about demographics. The US had more workers, added workers faster, and extracted more labour from its population than competitors. That advantage is gone and won’t return.

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