How do we reconcile Allah's statement in Surat Al-A'raf, "And He increased you in stature," with the Hadith indicating that human creation has been continuously decreasing in size since the time of Adam (peace be upon him)?

There is no contradiction between the noble verse and the noble hadith. "Bastah" (abundance/ample share) in creation includes the strength of bodies and minds, or their superiority over other nations in all aspects. The verse speaks about the physical strength of the people of 'Ad. As for the hadith, it explains that people have continuously decreased in height since Allah created Adam at sixty cubits tall, until the matter settled on what it is now.