« | »

Slowdown In Productivity = More Jobs?

From the relentlessly upbeat Associated Press:

Productivity gains slow, signal job growth ahead

AP Economics Writer

May 6, 2010

WASHINGTON (AP) — U.S. companies are running out of ways to increase productivity from leaner workforces, a sign that they may need to step up hiring in the months ahead.

That was the takeaway from reports released Thursday by the Labor Department.

Productivity grew at an annual rate of 3.6 percent in the first quarter, better than economists had expected. But it still declined sharply from growth that exceeded 6 percent for each of the previous three quarters

Still, economists predict the April jobless number, which is to be released Friday, will show unemployment stuck at 9.7 percent for a fourth straight month.

The economy has been growing since last summer, though firms have been slow to hire back workers. Many have opted instead to push their slimmed-down workforces to produce more.

That has translated into a surge in productivity. It grew at annual rates of 7.6 percent, 7.8 percent and 6.3 percent in the second, third and fourth quarters of last year.

Now, economists think companies are nearing the limits of how much they can expand output without hiring more workers…

Were no economists, but we seem to remember when it was the other way around. At least according to the experts at Reuters:

Productivity surges, job growth should follow

Lucia Mutikani
Thu Nov 5, 2009

WASHINGTON (Reuters) – U.S. business productivity grew at its fastest clip in six years in the third quarter and new claims for jobless aid fell to a 10-month low last week, suggesting the labor market may be starting to bottom out.

The Labor Department said on Thursday that productivity surged at a 9.5 percent annual rate, the quickest pace since the third quarter of 2003, as companies squeezed more output from a smaller pool of labor to hold the line on costs…

Analysts doubt that the rapid growth rate in productivity, which measures the hourly output per worker, can be sustained, which some analysts say means businesses may soon have to step up hiring to meet the demand for their goods and services…

And then there’s this, from the economists at Northwestern University’s Medill School of Business:

U.S. productivity grew in 2009, possible sign of job growth ahead

by Tara Lachapelle
Feb 04, 2010

Manufacturing, a large industry in Chicago, saw productivity increase 7.8 percent in the U.S. in the fourth quarter of 2009. Over the last four quarters, manufacturing productivity grew 6.5 percent.

The productivity of the U.S. labor force, a key measure of economic output, rose for the fourth consecutive quarter, the Bureau of Labor Statistics said Thursday in its preliminary report for 2009…

“We’ve had a very strong surge in labor force productivity,” said Russell Price, an economist from Ameriprise Financial Inc. “It’s very rare to get three quarters in a row to the magnitude that we’ve seen. Going back to the Great Depression, I think we’ve only seen situations such as this once or twice.” …

“You really can’t push the current staff levels much further without having to actually hire people, or else you’re going to be left not being able to meet demand,” he said. "Historically, this has been a very favorable indicator for job growth in the months ahead." …

Still, if these economic experts cover all their bases they are bound to be right eventually.

This article was posted by Steve on Thursday, May 6th, 2010. Comments are currently closed.

10 Responses to “Slowdown In Productivity = More Jobs?”

  1. bill says:

    Thanks for the laughs.

  2. Right of the People says:

    “Slowdown In Productivity = More Jobs?”

    Slowdown In Productivity = Union More Jobs?

    There I fixed it. Everyone knows that union workers produce ten times more than non-union workers. Just ask them, they’ll tell you.

  3. proreason says:

    Bush era: “Unemployment at historic low” Jobless recovery

    Obamy era: “Sun rises” Job growth ahead

    I used to think it was all just politics.

    But after observing “journalists” for a while, it’s clear that plain stupidity is an equivalent factor.

  4. BannedbytheTaliban says:

    Another spot on analysis from the ministry of truth.

  5. heykev says:

    I was beginning to think the easiest job in the world was being a meteorologist where my father lives near Palm Springs, CA. “Today will be hot and sunny with no rain in sight, tomorrow will be the same, heck….so will the next few months.”

    So, if the productivity goes either up or down we get more jobs under our Dear Leader. Guess I will have to change my easiest job ever to being an economist because no matter what you say, it’s correct. I am just thankful that George Bush is not in office, because that would mean would have been no matter if productivity goes up or down it would mean less jobs.

  6. As I have heard, “Even a broken clock will be right twice a day”

  7. taralach says:

    My article is not “from the economists at Northwestern University’s Medill School of Business.” I am a business reporter for the Medill News Service, a part of the Medill School of Journalism. The economist I interviewed has no affiliation with Medill or Northwestern; he’s from Ameriprise Financial Inc. and often looked to for expertise on the labor costs and productivity indicator. My opinion is no where in the article as I merely reported the facts of the economic indicator released for that date and am not an economist, but rather a reporter. Thank you.

    • Steve says:

      If you were a regular reader of this site, Ms Lachapelle, you would recognize that that introduction was meant somewhat facetiously.

      But the truth in the humor is that you are reporting what you are told as if it were fact — if only in your headline: U.S. productivity grew in 2009, possible sign of job growth ahead.

      If this is merely the opinion of an economist you interviewed, shouldn’t it read: Economist says U.S. productivity grew in 2009, possible sign of job growth ahead?

  8. proreason says:

    Ms Lachapelle’s article is propaganda, pure and simple.

    She regurgitated the administration’s lie of the day.

    The problem is with the word “productivity”. Most people who read that think it means that workers are finding ways to build things faster with less effort. But in fact, what “productivity” means in this context is a measurement of how much it costs to build something or provide a service. The article is probably accurate in stating that “productivity” has improved (i.e., it costs less to build something), but Ms Lachapelle, as the good little propagandist that she aspires to be, only obtusely points out that the improvement has resulted from layoffs and workers increased efforts to keep from being laid off, not from an improvement in skills or methods.

    Workers, who are rightly fearful of being laid-off themselves, are simply taking fewer breaks, working unpaid overtime, accepting lower wages for equivalent work, and increasing their pace of work. And business owners have cut back on quality and service. There is no evidence whatsoever that there is any productivity improvement at all in the way that goods are produced.

    For example, the owner of an ice cream shop used to have 3 people at all times to dispense the ice cream. That kept the wait time for your ice cream down to 2 minutes, and he was able to have his floor mopped every hour. After Obamy destroyed the economy, the owner now has 2 people at all times. The wait time can now be 10 minutes at peak and the floors get mopped twice a day. Eventually, somebody will slip and he will be sued, but hey, that’s life in Obamyland!!

    So now you see how the government’s definition of “productivity” works….they conveniently neglect to measure worker fatigue, and product and service degredation. It’s kind of like me bragging that I’ve got my weight under control at last, but forgetting to mention that I don’t have any money to buy food.

    But thanks Ms Lachapelle, from your benevolent government, for not only hiding the truth, but also for making Obamy appear to be a hero !!!

  9. Rusty Shackleford says:

    “…and am not an economist, but rather a reporter

    And that says it all.

« Front Page | To Top
« | »