Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  Nonfarm Productivity (Output Per Hour) Declined at a 2.0% Annual Rate in Q4
Posted Under: Data Watch • Productivity

Implications: Nonfarm productivity fell at 2% annual rate in the fourth quarter. This was not due to falling production; output increased at a 0.1% annual rate. Instead, productivity declined because the number of hours worked increased much faster than output, which means output per hour declined. Productivity was up 0.6% in 2011 and again 0.6% in 2012, so it appears that firms are having trouble squeezing out more production from their existing workforce. As a result, companies should continue to provide more hours for their workers. Another interpretation of the data is that the government is having a hard time measuring production in the increasingly important service sector, which means both output growth and productivity growth are higher than the official data show. (For example, do the data fully capture the value of an app that lets you save time picking a restaurant?) Either way, these figures are consistent with a plow horse economy. From 1973 through 1995, productivity growth averaged 1.4% per year. Since then it's averaged 2.3%. Despite slower productivity growth in the past two years, we think the long-term trend in productivity growth is still strong, a result of the technological revolution that began in the 1980s. In the year ahead, we look for faster productivity growth than in the past two years. In other news this morning, new claims for jobless benefits declined 5,000 last week to 366,000. Continuing claims for regular state benefits rose 8,000 to 3.22 million. These figures are consistent with continued improvement in the labor market.

Click here for a PDF version
Posted on Thursday, February 07, 2013 @ 12:29 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
The ISM non-manufacturing index declined to 55.2 in January
The Pessimists Are Losing
Optimism Is Winning
The ISM Manufacturing Index Rose to 53.1 in January from 50.2 in December
Non-Farm Payrolls Increased 157,000 in January
Kudlow is Right: The Spending Sequester Will Grow the Private Economy
Personal Income Up 2.6%, Consumption Up 0.2% in December
How Does U.S. Get Its Economy Back on Track?
Fed Inches Toward More Optimism
First Trust's Wesbury on U.S. Economic Growth
Skip Navigation Links.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2017 All rights reserved.