With an article headline like this "Productivity rises 6.4%, Fastest rate in Six Years" you'd think the news was good. And the beginning of the Marketwatch article seems to convey a positive message:
Back to Marketwatch with some more sobering news:
U.S. companies slashed their workers' hours in the second quarter, boosting the productivity of the workplace to an annualized rate of 6.4%, the Labor Department reported Tuesday. It was the fastest increase in productivity in the nonfarm business sector in nearly six years. Economists surveyed by MarketWatch had been looking for a gain of 5.4%.Was hourly output up 6.4% annualized in Q2? Yes. But OVERALL output was down again and at an increasing rate (hours were slashed).
Back to Marketwatch with some more sobering news:
Unit labor costs -- a key indicator of inflationary pressures -- plunged at a 5.8% rate, the largest decline in nine years and slightly wider than the 5.3% decline expected by economists. Hourly compensation rose just 0.2% in the second quarter. After inflation, real hourly compensation sank 1.1%. Read the full government report.
"U.S. businesses have slashed employment aggressively in order to cut costs and to streamline their businesses," wrote Harm Bandholz, an economist for UniCredit Markets.
Source: BLS
another sobering post...thx.
ReplyDeleteCan we see productivity x wages/hour to get a sense of earning power?
i guessing companies at this point have trimmed as many people and hours as possible. Next hit is wages...
as i posted yesterday, if productivity/person goes up, salaries should get a boost as well...but I'm guessing its a case of less people working less hours for less $/hour.
if you are a company, and you can hire a guy to work twice as hard for 30% less (because he desperately needs a job), you can imagine who will get the job.
Case in point: Around here mowing services used to charge $50/mow. Two months ago I found an out of work contractor that will do 2 mows for the same price. Yikes!