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Yippee! Productivity Fell .9% In Second Qtr

From the (now) relentlessly upbeat Associated Press:

Productivity falls 0.9 percent in second quarter

By Martin Crutsinger, AP Economics Writer
August 10, 2010

WASHINGTON – Worker productivity dropped this spring for the first time in more than a year, a sign that companies may need to step up hiring if they hope to grow.

Productivity declined at an annual rate of 0.9 percent in the April-to-June quarter after posting large gains throughout 2009, the Labor Department said Tuesday. Unit labor costs edged up 0.2 percent in the second quarter, the first increase since the spring of 2009.

Employee output rose by large amounts during the recession. Companies slashed their payrolls and pushed unemployment up to the highest levels in more than two decades. Economists said a slowing in productivity would be a welcome development if it translates into more hiring.

"Economists often tout the long-run benefits of strong productivity growth, but given the precarious state of the economy, a little more employment, even at the expense of productivity, would likely be helpful in the near term," said Sal Guatieri, senior economist at BMO Capital Markets

Output of U.S. workers is the key ingredient to boosting living standards. It allows companies to pay workers more because of the increased production without being forced to raise the cost of their goods, which sparks inflation.

Still, economists contend that the big productivity gains of recent quarters are actually harming the economy’s prospects for a sustainable rebound.

They believe companies need to stop slashing their work forces and start rehiring laid off workers. That will boost incomes and give households the support they need to increase consumer spending, which accounts for 70 percent of economic activity

Oddly enough, the economic gurus at Reuters are saying just the opposite today:

Productivity underlines slow pace of recovery

By Glenn Somerville Glenn Somerville
August 10, 2010

WASHINGTON (Reuters) – Non-farm productivity fell for the first time in 1-1/2 years during the second quarter and labor costs barely edged up, according to a Labor Department report on Tuesday that underlined a slowing pace of economic recovery…

Some analysts said the data bode poorly for out-of-work Americans.

"When productivity is high and rising then it suggests firms are doing more with fewer people and suggests some pressure to hire new workers. If productivity is falling, as in this case, it suggests they don’t need as many workers," said Scott Brown, chief economist for Raymond James & Associates in St. Petersburg, Florida

But this is not the first time that the AP has argued that a drop in productivity is great news for the economy. As we noted at the time, the very same author wrote this back in May:

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

Meanwhile, back in November, Reuters was again saying just the opposite – that more productivity means more jobs:

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

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

Our media masters need to pick a story and stick to it.

This article was posted by Steve on Tuesday, August 10th, 2010. Comments are currently closed.

6 Responses to “Yippee! Productivity Fell .9% In Second Qtr”

  1. proreason says:

    When will businessmen stop undermining our leader’s brilliant agenda to renew the country?

    Clearly, they value their “profits” more than the utopia our leader has outlined.

    Some are going to have to be thrown into jail. It’s that simple. Perhaps all of them. Imagine the boom as millions of jailers are hired to keep their boots on the necks of these businessmen subversives.

    • untrainable says:

      Damned Capitalists! Don’t they realize that if the government is just allowed to pay everybody then everybody will be the same. And we’ll all live in namby pamby la-de-dah socialist utopia. I hope there’s room for my unicorn. I hope everybody eles has a unicorn, or I’ll just have to give mine up so we can all share.


    • Rusty Shackleford says:

      ut, As you well know, the goal of utopia is unattainable. Even if 99.9999% of that goal was realized and we all got our energy from some magical place, no one ever died, disease eradicated, no injustice of any kind, all of us…..”equal” it would be the same as hell.

      The dedicated socialists are just that. Dedicated. They are perpetually unhappy. Their raison d’etre is to conintually find unhappiness and use it to their advantage, thus making their own unhappiness justified.

      It’s not the first time that those in power with such severe personality disorders have commanded their desires unto the people of lesser or no power. History is full of such cases. So far, ours is more benign but threatens to be very bad. Human history is riddled with this group or that that surges to power and eventually subsides. We are in the midst of “the next big thing” and the history books will discuss it as they do the rise of the Roman Empire or the Nazi’s third reich.

      My biggest sadness is that I have to live through it. That I have to suffer at the hand of mentally deficient people who covet power and lie as to why they need it. That’s nothing new, historically speaking…but I often had put myself in the times I read about in history books and wondered how I’d have handled it.

      Now I know. There is little I can do but speak out, resist, and VOTE. But that may not be enough. I damn sure don’t like it and the socialists who think it’s for the best won’t realize what they’ve lost until it’s gone. That’s always been the case in human history.

      Those of us who know it’s happening and are trying to stop it are squelched by the socialist operatives. Then, there are all the “human” factors like xenophobia, racism, sexism, etc etc…all used as weapons against the established norm.

      For anyone who ever wonders about how nations die…take copious notes for we’re in the middle of it. I have horrible fantasies of some time in the future were the “authorities” come and take my car away because it is not permitted, or they tell me I can work there, but not here…etc etc. Or, because I am a white male, I am obsolete and cannot work anywhere because I somehow contributed to racism and it’s the black man’s turn now.

      It’s a scary thing to think about and the socialists pooh-pooh it but so they did in the Russian Revolution, in 1930’s Germany, in Cuba during their revolution (it’s worked out so well, hasn’t it?) and on and on.

      We must not let what happened then, happen now. They want it, they have already lied, cheated and stolen to get it and they plan on continuing to do so. They are the enemy and we can’t afford to “play nice” and “reach across the aisle” as they will cut our hand off if we do. And then laugh.

      They’ll whine loudly at first but then when they realize we won’t let up, they’ll shut up.

    • proreason says:

      “We must not let what happened then, happen now. ”

      The most amazing thing is that they continue to be able to convince a new set of rubes that it will be different this time. And when I say “rubes”, I’m including the entire population of the Ivy League student body, past and present.

      Notice Greece….it hasn’t made the slightest dent in their allegiance to a philosophy that has never worked. But we shouldn’t be surprised. Venezuala, Cuba, Nicaraugua, Vietnam, North Korea, Red China, the USSR, dozens of African countries, hundreds of socialist experiments in dozens of countries…..none of that makes the slightest difference to them. No amount of poverty, no amount of dispair, no amount of violence, no amount of gulags make a difference.

      Lust to steal the wealth of the other guy cannot be satisfied.

    • tranquil.night says:

      “The most amazing thing is that they continue to be able to convince a new set of rubes that it will be different this time.”

      They have complete formulas for how to manipulate the ignorant into their camp which basically amount to attaching a political agenda to everything in one form or another. They’re getting ’em younger and younger too. Even SpongeBob is passive Liberal social commentary these days. Disney? Hell they’ve scammed millions of Middle Class religious parents for decades with their false moral brand and successfully manufactured the generation of Spears, Lohan, and Cyrus.

      “hundreds of socialist experiments in dozens of countries…..none of that makes the slightest difference to them.”

      Exactly, the problem we’re having is accepting that they’re not naive. They’ve been engaging in social engineering for decades – at all levels, across all industries and institutions, through all sorts of social justice schemes. They understand the consequences completely; the subprime meltdown wasn’t sudden and spontaneous, it was planned, sat on, then executed at the most opportunistic time. Further, predicting the aftermath to our nation and the economics of a bunch of socialist states worldwide when the US decides to abandon fiscal sanity and supply-side isn’t magical prophecy but simple logic.

      We can only conclude that the monotonously predictable results are in fact the intended results.

      One of Reagan’s more sobering quotes: “Freedom is never more than one generation away from extinction.”

      That’s because it’s easy to take for granted when times aren’t hard. It’s easy to buy into whatever seductive lie Liberalism is advertising. As we continued to modernize and daily life for the individual grew more and more ambiguous and nuanced, it became much easier for the defunct philosophy to take hold culturally that it takes an elite group of central planners to engineer modern society. So as planned the government adapted to these new social attitudes by increasing its size and depth of control.

      Now we get drivel like this, from Google’s Eric Schmidt: “There was 5 exabytes of information created between the dawn of civilization through 2003 but that much information is now created every 2 days, and the pace is increasing…People aren’t ready for the technology revolution that’s going to happen to them.

      The only way to manage this is true transparency and no anonymity. In a world of asynchronous threats, it is too dangerous for there not to be some way to identify you. We need a [verified] name service for people. Governments will demand it.

      There’s no way to overstate the elitism of the ruling class and how little they regard liberty. I might have to do a word search just to find an appropriate term. If it had a definition it would be the belief that free people will not create a just society on their own and in fact have been a plague to this planet since the inception of consciousness.

      HEH. Wouldn’t you know it, I found the term: Satanism (which unsurprisingly is “the Left-Hand Path“).

  2. AcornsRNutz says:

    “Companies slashed their payrolls and pushed unemployment up to the highest levels in more than two decades.”

    Yep, for no seemingly good reason, these companies fired everyone (just to line their pockets with a minor short term profit no doubt). This drop in productivity is clearly their uppance coming. Good thing oblam’s the man with the plan to put this right.

    And TN, great post. Normally I feel somewhat reassured when I hear my own thoughts more or less expressed by someone whose insight I generally respect. In this instance, it’s actually a little scary.

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