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Author Topic: WTF: Productivity in Q3 Rise at 9.5%  (Read 1549 times)
phk
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« on: November 06, 2009, 11:41:16 am »
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Productivity in Q3 Rise at 9.5%
Last Update: 9:52 AM ET November 05 2009

Nonfarm business sector labor productivity increased at a 9.5% annual rate during the third quarter of 2009. From the second quarter of 2008 to the second quarter of 2009, output fell 3.5% while hours fell 7.5%, resulting an increase in productivity of 4.3%.

 
The following is the unedited transcript of the news release from the Bureau of Labor Statistics of the U.S. Department of Labor.

Nonfarm business sector labor productivity increased at a 9.5 percent annual rate during the third quarter of 2009, the U.S. Bureau of Labor Statistics reported today. This was the largest gain in productivity since the third quarter of 2003, when it rose 9.7 percent. 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. Output increased 4.0 percent and hours worked decreased 5.0 percent in the third quarter of 2009 (All quarterly percent changes in this release are seasonally adjusted annual rates).

From the third quarter of 2008 to the third quarter of 2009, nonfarm business output fell 3.5 percent and hours worked fell faster, 7.5 percent, resulting in a productivity increase of 4.3 percent (tables A and 2). The four-quarter decline in hours was the largest in the series, which begins in 1948. Nonfarm business productivity rose 1.8 percent in 2008, and 2.6 percent per year on average during the 2001-2007 period corresponding to the last complete business cycle.

Unit labor costs in nonfarm businesses Unit labor costs in nonfarm businesses fell 5.2 percent in the third quarter of 2009; the increase in productivity outpaced the increase in hourly compensation. Unit labor costs declined 3.6 percent over the last four quarters--the largest decrease since the series began in 1948 (tables A and 2). BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.

Productivity increased 9.8 percent in the business sector in the third quarter of 2009. This was the largest increase in the series since the second quarter of 1972. Unit labor costs decreased 5.1 percent during the third quarter of 2009 (tables A and 1).

Manufacturing sector productivity grew 13.6 percent in the third quarter of 2009, as output increased 7.7 percent despite a 5.2 percent decrease in hours worked. This was the largest increase in the quarterly productivity series, which begins in 1987. Over the last four quarters, manufacturing productivity increased 3.1 percent as output and hours declined 10.8 percent and 13.5 percent respectively (tables A and 3). Manufacturing sector productivity increased 0.8 percent in 2008, and at an average annual rate of 4.0 percent from 2001 to 2007.

In the third quarter of 2009, changes in productivity, output, and hours were larger in durable goods producing industries than in nondurable goods industries (tables A, 4 and 5).

Manufacturing unit labor costs fell at a 7.1 percent annual rate in the third quarter of 2009, but increased 2.3 percent over the last four quarters (tables A and 3).

The data sources and methods used in the preparation of the manufacturing output series differ from those used in preparing the business and nonfarm business output series, and these measures are not directly comparable. See Technical Notes for further information on data sources.

Revised measures

In the second quarter of 2009, nonfarm business productivity growth was revised up to 6.9 percent, reflecting declines in output and hours of 1.1 percent and 7.5 percent, respectively. Unit labor costs were revised down due to the upward revision in productivity. In the manufacturing sector, revised second quarter productivity growth was 6.8 percent, a 1.9 percentage point upward revision. Manufacturing unit labor costs declined 1.6 percent, rather than rising 0.2 percent as reported September 2.

In the nonfinancial corporate sector, revised data for the second quarter of 2009 show that productivity increased 6.6 percent, as output per hour was revised up along with output; hours were unrevised. After revision, unit labor costs fell 4.5 percent in the second quarter, but rose 1.4 percent from the second quarter of 2008 to the second quarter of 2009. Unit profits grew at a 23.0 percent annual rate in the second quarter of 2009.

Available at:

http://stats.bls.gov/news.release/prod2.nr0.htm
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CARLHAYDEN
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« Reply #1 on: November 06, 2009, 12:16:19 pm »
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Like so many of the third quarter statistics, this is likely to be subsequently downwardly revised.
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« Reply #2 on: November 06, 2009, 02:12:29 pm »
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Like so many of the third quarter statistics, this is likely to be subsequently downwardly revised.

Did you see how unemployment numbers were revised downwards for August and September? It's not all bad (although October's unemployment numbers were depressing).
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« Reply #3 on: November 06, 2009, 02:22:23 pm »
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The economy is doing fine is some ways; just not the right ways.

Don't worry though, the Gipper tells us it'll trickle down eventually.
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CARLHAYDEN
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« Reply #4 on: November 06, 2009, 02:56:50 pm »
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Like so many of the third quarter statistics, this is likely to be subsequently downwardly revised.

Did you see how unemployment numbers were revised downwards for August and September? It's not all bad (although October's unemployment numbers were depressing).

Apparently you are unaware of the distinction between monthly numbers (such as the unemployment rate) and quarterly numbers (such as GDP).

While there have been problems with monthly unemployment numbers (mostly with the summer numbers), the third quarter numbers (such as GDP) have been seriously jiggered (I have posted specifics on other threads in this forum).

So, you are comparing apples to oranges.
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« Reply #5 on: November 06, 2009, 03:43:27 pm »
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The economy is doing fine is some ways; just not the right ways.

Don't worry though, the Gipper tells us it'll trickle down eventually.

Is that supposed to be a joke?  Do you really think the Dow going to 10,000 is a leading indicator? 
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« Reply #6 on: November 06, 2009, 05:45:48 pm »
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The economy is doing fine is some ways; just not the right ways.

Don't worry though, the Gipper tells us it'll trickle down eventually.

Is that supposed to be a joke?  Do you really think the Dow going to 10,000 is a leading indicator? 

Productivity increases are though Tongue
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phk
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« Reply #7 on: November 06, 2009, 06:44:51 pm »
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This will really dampen hiring enthusiasm for the future. I have a hard time seeing output growth exceeding these strong productivity numbers. Though its always a nice thing to see productivity in services picking up.

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« Reply #8 on: November 07, 2009, 06:55:18 am »
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Productivity growth is always a good thing; however, it is precisely the problem with capitalism that this increase is always misallocated in a way which creates great and ever increasing instability.
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« Reply #9 on: November 07, 2009, 08:39:33 am »
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This will really dampen hiring enthusiasm for the future. I have a hard time seeing output growth exceeding these strong productivity numbers. Though its always a nice thing to see productivity in services picking up.



Here's what Business Week has to say:

http://www.businessweek.com/investor/content/nov2009/pi2009115_469402.htm?campaign_
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« Reply #10 on: November 08, 2009, 05:15:26 am »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.
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« Reply #11 on: November 08, 2009, 03:49:35 pm »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.

This post made me smirk...
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« Reply #12 on: November 08, 2009, 04:16:57 pm »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.

This post made me smirk...

Perhaps I should have said - 'the obvious solution to lack of demand/overproduction caused by inequitably distributed productivity growth'.
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« Reply #13 on: November 08, 2009, 10:02:03 pm »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.

This post made me smirk...

Perhaps I should have said - 'the obvious solution to lack of demand/overproduction caused by inequitably distributed productivity growth'.

But people are already working 32 hours a week because of the recession.
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ag
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« Reply #14 on: November 08, 2009, 11:59:11 pm »

"Productivity" in macro is, generally, a shorthand for "whatever we have no clue about".

It is, usually, defined as a "residual" left over once the inputs have been accounted for. In principle, it could be growing in recessions: if we fire inputs, presumably we start from the less efficient ones. However, overall, it is precisely what I said before: whatever we don't know.
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opebo
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« Reply #15 on: November 09, 2009, 05:23:46 am »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.

This post made me smirk...

Perhaps I should have said - 'the obvious solution to lack of demand/overproduction caused by inequitably distributed productivity growth'.

But people are already working 32 hours a week because of the recession.

But the key is they are only being compensated for 32 hours.  The way we fix the economy is to have them work 32 hours but receive (at least) the same pay they used to get for 40 hours.  In this way we are effecting a redistribution (reducing theft and privilege).   If we just reduce hours AND pay, we accomplish nothing whatsoever.
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« Reply #16 on: November 09, 2009, 07:14:36 pm »
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The obvious solution to productivity growth is to shorten the work week - anything over 32 hours is obscene - and to hire hundreds of thousand at government 'make work' sinecures.

This post made me smirk...

Perhaps I should have said - 'the obvious solution to lack of demand/overproduction caused by inequitably distributed productivity growth'.

But people are already working 32 hours a week because of the recession.

But the key is they are only being compensated for 32 hours.  The way we fix the economy is to have them work 32 hours but receive (at least) the same pay they used to get for 40 hours.  In this way we are effecting a redistribution (reducing theft and privilege).   If we just reduce hours AND pay, we accomplish nothing whatsoever.

I don't see the purpose really. What we need to do is try to effect both wage growth and job security over the long run to stablise the economy. But doing that isn't going to be easy and it may be impossible. Business Managment styles need to change and value there workers mores as there most precious of assets and focus on building them up for the long term benefit of the business and not tossing them away like trash.
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opebo
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« Reply #17 on: November 10, 2009, 03:34:54 am »
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I don't see the purpose really. What we need to do is try to effect both wage growth and job security over the long run to stablise the economy. But doing that isn't going to be easy and it may be impossible. Business Managment styles need to change and value there workers mores as there most precious of assets and focus on building them up for the long term benefit of the business and not tossing them away like trash.

These things can only be changed if the control is wrested away from the elite, NC Yank.  Of course they value the workers as exactly what they are - powerless chattel.  The only way the 'management style' changes is if the workers get (at least some) power.

We need to take political action to require shorter work weeks, higher pay, and a redistribution of income and security away from the privileged and towards the commoners.  (I agree that this may be 'impossible' or in any case they'll try to kill people to prevent it, but I'd still recommend fighting).
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« Reply #18 on: November 10, 2009, 11:44:59 am »

We need to take political action to require shorter work weeks, higher pay, and a redistribution of income and security away from the privileged and towards the commoners. 

We need to do this, of course, so that the commoners can securely live poorer and less happy lives, with reduced opportunities for bettering it and with social mobility sharply restricted, so that the social status of even the lamest members of aristocracy never gets challenged. Tell me, are you a son of a British lord, or what?
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opebo
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« Reply #19 on: November 10, 2009, 12:23:37 pm »
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Yes, I'm quite familiar with your fantasy world, ag.  By the way, do you live in Texas?  Have you ever left the Bad Place?  And have you ever met a European?
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ag
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« Reply #20 on: November 10, 2009, 01:11:32 pm »

Yes, I'm quite familiar with your fantasy world, ag.  By the way, do you live in Texas?  Have you ever left the Bad Place?  And have you ever met a European?

Oh, sure. Unlike you, I am not going to conceal my links to nobility Smiley So,

1. I've been exactly twice to Texas: once to El Paso (well, twice really - I was in Mexico for most of the trip, El Paso was, mostly, an airport for me, though I did spend a couple of nights in a hostel) and once to Austin. I also know reasonably well the insides of the Houston airport - they usually detain me in immigration there (and only there) for some strange reason, so I've spend time in places you don't suspect about Smiley DFW is better than HOU, in my experience - I can usually make the scheduled connection there.  Never been anywhere else in Texas. In the US I've spent 9 years in and around NYC. These days I usually go to Boston, though in the past year or so I've been also to Chicago, NY and SF.

2. I grew up in the former USSR. But if that's not European enough for you, I lived in Spain for about a year. Is that Europe? I also spent a couple of months in Australia (was considering a move) - not really European, but it tries Smiley As for Europeas - well, just talked to 2 in the morning, will be talking to the third one in a sec (though he has naturalized as a Mexican recently, so he might not qualify). Anyways, why Europeans? There are mostly (Latin) Americans around here - do you really think they are that bad? I always knew you don't like the non-white people.

3. I don't know, what's the "Bad Place", but I've been living in Mexico for most of the past decade (and took its citizenship).  Perhaps, in your book Mexico qualifies as Texas South. Is this country really capital-B "Bad"?
« Last Edit: November 10, 2009, 01:15:20 pm by ag »Logged
opebo
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« Reply #21 on: November 10, 2009, 04:26:55 pm »
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Just curious.
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