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 Increased at a 1.3% Annual Rate in the Fourth Quarter
Posted Under: Data Watch • Productivity

 

Implications:  Productivity continued to grow in the 4th quarter, coming on the back of a large gain in productivity in the third quarter. Nonfarm productivity grew at a 1.3% annual rate in Q4.  Hours continued to increase at a decent clip and output climbed even faster so output per hour increased. Measured productivity has accelerated lately, up 1% from a year ago, versus a 0.4% gain in the year ending in the fourth quarter of 2015.  However, we think government statistics underestimate actual productivity growth. (For example, do the data fully capture the value of smartphone apps, the tablet, the cloud, Alexa...etc.?)   We believe the figures from the government miss the full value of technological advances, such as all those free smartphone apps so many people carry around in their pockets.  The figures from the government miss the value of these improvements, because anything free, no matter how much it improves everyday life, isn't included in output, which means it's not included in productivity either.  This means our standard of living is improving faster than the official reports show.  Still even on the manufacturing side, where it's easier to measure output per hour, productivity is up only 0.4% in the past year.  In spite of the measurement problems, we anticipate faster productivity growth over the next few years as better policies lead to a smaller government and a more vibrant private sector. In turn more new technology from a stronger private sector will increase output in many sectors of the economy.  Meanwhile a tighter labor market and faster growth should generate more pressure for efficiency gains, while the technological revolution continues to provide the inventions that make those gains possible.   In other news this morning, new claims for jobless benefits declined 14,000 last week to 246,000.  Continuing claims fell 39,000 to 2.06 million.  Plugging this into our models puts our final forecast for tomorrow's jobs report at an increase of 195,000 in nonfarm payrolls (versus a consensus 175,000).  In other recent news, automakers reported sales of cars and light trucks at a 17.6 million annual rate in January, a robust rate, but down 4.4% from the torrid pace in December and down 1.6% from a year ago.

Click here for PDF version

Posted on Thursday, February 2, 2017 @ 10:00 AM • 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.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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 © 2019 All rights reserved.