U.S. worker productivity has increased by 1.5% this past quarter, a .2% increase from what was expected. This change will result in a modest increase in labor costs that will keep inflation down. On Thursday, September 7, the Labor Department stated that nonfarm productivity, which measures hourly output per worker, rose at a 1.5 percent annualized rate. Over the past several quarters, there has a been a slight yet steady rise in the productivity of workers. Despite this upward movement, however, the trend remains slow, implying that it will be difficult for there to be booming economic growth in the near future. Last week the government also revised the second quarter GDP growth to a 3 percent rate from its previously expected 2.6 percent rate. As workers become more productive, the GDP will climb, as the output for workers will be higher. According to the Bureau of Labor Statistics, "Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours of all persons, including employees, proprietors, and unpaid family workers." However, while any increase in productivity will benefit GDP and output, it will have a more negative impact on unemployment. A demand for more output is generally what drives employment to increase. However, with the demand satisfied in fewer hours, fewer jobs will be required. While this slight increase in productivity will have a positive impact on GDP, the effect on unemployment should remain small.
https://www.cnbc.com/2017/09/07/us-final-q2-productivity-rose-1-point-5-percent-vs-1-point-3-percent-increase-expected.html
Given that this quarter's numbers are not updated with the recent natural disasters, it makes me wonder how these statistics will be affected (especially on the GDP). On one hand, relief and rebuilding efforts might influence them positively. Inversely, the sheer loss of property (and therefore both human capital and investments) might tilt the scale the other way.
ReplyDeleteThe numbers may be lowered due to the two hurricanes that hit the southern parts of the US and also due to DACA. productivity definitely would take some damage from these events. The phenomena are already affecting the market, such as increase in oil, home appliances, etc. Recovery will take time and productivity would not be as high as it was up to the second quarter.
ReplyDelete