Productivity & Costs Q1 2011

Q1 2011 Productivity & Costs was revised today. Labor productivity increased +1.8%. Output increased +3.2% and hours worked increased 1.4%. From Q1 2010, annual productivity increased +1.3%, output +3.2% and hours +1.9%. Below is business, nonfarm labor productivity per quarter. Workers are still being squeezed, and with such high unemployment, we need productivity to dramatically decline, forcing U.S.

Productivity & Costs Q3 2010

Q3 2010 Productivity & Costs was released today. Labor productivity decreased +1.9%. Output increased +3.0% and hours worked increased 1.1%. For the year, Productivity increased +2.5%, output +4.1% and hours +1.6%.

United labor costs dropped -0.1% and are down -1.9% for the year. Frankly this implies workers are being squeezed. Real wages only increased 0.7% for Q3 2010.

Productivity & Costs Q1 2010 Revised

Labor Productivity for Q1 2010 was significantly revised from the original report. Labor Productivity rose 2.8% in Q1 2010 versus the original 3.6% reported.

Nonfarm business sector labor productivity increased at a 2.8 percent annual rate during the first quarter of 2010, the U.S. Bureau of Labor Statistics reported today, with output rising 4.0 percent and hours rising 1.1 percent.

Hourly compensation increased 1.6% for the last four quarters.

For the year labor productivity increased 6.1% and hours worked fell 3.0% and output increased 3.0. They haven't seen numbers this high since 2002.

What caused the revision? People worked more hours than originally thought.

The basic equation for labor productivity is \frac{Q}L

Where Q is the total output of industry and Labor is measured in hours only. Both values are normalized to a base year.

Hourly compensation was also revised from 2.3% to 1.5% in gains. But this number is a bit misleading because in terms of real compensation, the people gained zero. In other words, people worked much more, yet hour per hour, gained nothing.

Unit labor costs in nonfarm businesses fell 1.3 percent in the first quarter of 2010, as the 2.8 percent increase in productivity outpaced a 1.5 percent gain in hourly compensation.

Q4 2009 Productivity & Costs, revised upward to 6.9%!

Oh woe to the American worker! The revised Q4 2009 Productivity & Costs BLS report gives some horrific news in terms of job creation and sharing the wealth for the U.S. worker. Firstly, a reminder on how labor productivity is calculated:

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.

When you see soaring productivity, with reduced or low output and unit labor costs down, that means the U.S. worker is getting royally screwed.

Unit Labor costs dropped 1.7% on an annual basis, the largest on record!

Productivity - Wage Gap Grows

Labor Department announced today that productivity of U.S. workers rose 6.4% in the second quarter of 2009. Productivity is measured by output per hours of workers. The largest increase since the third quarter of 2003.

Here is the kicker:

The huge increase was due to hours working declined faster than output.

Oh, wait there is more:

Hourly compensation in the nonfarm business sector increased 0.2 percent in the second quarter of 2009, compared to a decrease of 2.4 percent one quarter earlier. When the 1.3 percent rise in consumer prices was taken into account, real hourly compensation fell 1.1 percent in the second quarter of 2009 (seasonally adjusted annual rates).

So, wages are not even competing up with inflation.

We have the productivity-wage gap growing. We have hours worked falling. We have real hour compensation decling.

This all translate to more destruction of the middle class and more income inequality. Our economic growth model is broken, as Dr. Palley argues, and this report is just another example of that.

I am adding these quotes from this news story because, in my opinion, show the total disregard for the survival of the middle class:

"It's good because it helps keep inflation low; labor costs are pretty benign," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida.