U.S. Productivity Growth Is The Highest in 4 Years, Real Compensation Up by 2.7%
According to the BLS's report today, productivity in the nonfarm business sector grew by 4.9% in the third quarter, the largest gain in four years - since the third quarter of 2003. The 4.9% productivity growth was well above Wall Street's expectation of 3.4% growth, was also more than twice the average productivity growth over the last 25 years of 2.07% (see chart above, click to enlarge). The BLS also reported that real compensation, adjusted for inflation, rose 2.7% in the third quarter, well above the average of 2.08% over the last ten years.
4 Comments:
Maybe productivity (=output per hour) increased because hours worked decreased a half point (See Series PRS85006032).
I also note that productivity increased 5.6% in the first quarter of the 2001 recession.
But if output increased while hours worked decreased, isn't that a good thing?
It took us less time to produce more.
Sounds like more leisure time to me.
Time to crack open another Bell's.
Productivity increased and workers shared in the gain with their employers by increased real compensation. It sounds all good and right to me.
Well, if the output was going to inventory, then, no -- output increasing and hours decreasing is not necessarily a good thing. Shrinking hours worked may be due to layoffs; reduced hours, etc. Productivity is a very noisy signal and is not a very good indicator of economic health, IMO. As I said, productivity spiked before the 2001 recession also.
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