Productivity Dives, Goes Negative For First Time Since 2008

factory, 1940s, library of congress

Photo: Library of Congress

Interesting.US nonfarm productivity dived 0.9% in Q2 vs 3.9% in Q1.

The market was looking for growth of 0.1%.

The culprit: higher labour prices! Are we seeing wage inflation with nearly 10% unemployment?

It marks the first time that productivity went negative since q4 2008.

Here’s what the BLS says:

Nonfarm business sector labour productivity decreased at a 0.9 per cent
annual rate during the second quarter of 2010, the U.S. Bureau of
labour Statistics reported today, with output and hours rising 2.6
per cent and 3.6 per cent, respectively. (All quarterly per cent changes
in this release are seasonally adjusted annual rates.) The decline in
output per hour follows five quarters of strong productivity growth.
The second-quarter gain in hours worked was the largest since the
first quarter of 2006 when hours rose 4.1 per cent. From the second
quarter of 2009 to the second quarter of 2010, both productivity and
output increased 3.9 per cent; hours were unchanged (tables A and 2).

labour productivity, or output per hour, is calculated by dividing an
index of real output by an index of hours worked of all persons,
including employees, proprietors, and unpaid family workers.

Read the whole announcement here >

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