Productivity Decline Greatest Since 2008

This is a tad worrisome:

Nonfarm business sector labor productivity decreased at a 3.2 percent annual rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.2 percent and output decreased 1.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decrease in productivity was the largest since the first quarter of 2008 (-3.9 percent).

And this:

In the first quarter of 2014, nonfarm business productivity fell 3.2 percent, a greater decline than was reported in the preliminary estimate. The revised figure reflects a 1.4 percentage point downward revision to output and a 0.2 percentage point upward revision to hours.

You can read the whole report here

No one else seems to be reporting on the revised numbers, which mirror that of the 1st quarter of 2008 (-3.9).

Couple this with the report last week that the “economy in the U.S. contracted for the first time in three years from January through March as companies added to inventories at a slower pace and curtailed investment”.

It will be interesting to see what the unemployment numbers show on Friday.

Friday update: Unemployment stays flat


  1. Erin says

    yes, thank you for posting this. The report came out on Wednesday, and not a peep from regular media. obama is trying to claim that all the job losses have been recovered. This report (and others) remind us it is not true

  2. Alan Joel says

    Erin, you are correct. Job creation has barely kept up with population growth — and in some months didn’t even cover it. You could add all the “jobs created” and that might technically equal the number of “jobs lost” but a healthy economy adds jobs above and beyond the number needed to keep pace with the population. That is the true problem and one not talked about.
    I think the number needed monthly just for population growth is 110-140K jobs. Above that, then we are getting somewhere. But I remember months were job creation wasn’t even 100K. The recovery is so anaemic, which is why you need to look at other stats like the one above.

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