For most of the past six years, the U.S. economy faced a demand problem as tight credit, economic pessimism and a fixation on reducing debt discouraged consumers, businesses and government from spending.

Demand finally looks healthy again. Business is hiring at the fastest pace since 2000, consumer confidence is at prerecession levels and government austerity has come to an end.

Yet as demand heals, there are growing signs that the economy has a problem with supply, or the ability of the economy to produce goods and services using all available labor, capital and know-how. Supply determines how fast the economy grows over the long term, and it largely depends on two things: the number of workers, and how productive they are.

The evidence is mounting that those two key drivers of the economy’s supply side, the labor force and productivity, are seriously impaired. This isn’t holding the economy back at present, but before long it will. An economy with a sickly supply side will struggle to generate higher standards of living.

Supply-side troubles pose a problem for the Federal Reserve because diminished supply means demand will more easily exceed the economy’s productive capacity, fueling inflation. And it’s an even bigger headache for President Barack Obama because slower long-term growth makes it harder to pay down the national debt and finance social programs, and his policies have yet to fully grapple with the challenge.