Productivity in the U.S. Unexpectedly Accelerates

[Godhumor]

Source: Bloomberg

The productivity of U.S. workers unexpectedly increased in the fourth quarter at a faster rate as companies sought to contain costs.

The measure of employee output per hour rose at a 2.6 percent annual rate, compared with a revised 2.4 percent gain in the previous three months, figures from the Labor Department showed today in Washington. Economists projected a 2 percent advance, according to the median forecast in a Bloomberg News survey. Labor expenses fell for fifth time in six quarters.

Employment may improve as companies such as Ford Motor Corp., which cut jobs and boosted efficiency during the recession, now look to expand as sales pick up. Falling labor costs give the Federal Reserve more reason to stick to its unconventional easing program through June.

“As payroll growth remains sluggish, essentially businesses are squeezing more work out of each employee,” Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report.


Read more: http://noir.bloomberg.com/apps/news?pid=20601087&sid=aPfOfpse.UZE&pos=1

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So two things. First, in what I am sure is no surprise to anyone, this shows that a lot of companies really have decided that fewer people can do more work beyond removing redundant or obsolete positions in the name of lowering costs. Secondly, hopefully, this means that companies have to hire as recovery continues, as I think there we have hit a productivity gain plateau.

Will be interesting to see what the employment picture looks like in 6 months.

[COLGATE4]

1. It's not just that a lot of companies really have decided that fewer people can do more work beyond

removing... positions in the name of lowering costs. It's also because the survivors are pushing themselves beyond any recognizable limit in the hope that they may be spared in the next wave of downsizings.

[RUMMYisFROSTED]

2. 'Zactly.

[bowens43]

3. increased productivity is not a good thing.

It means more layoffs and fewer jobs. requiring work harder and longer hours.

[Uncle Joe]

4. I wonder how much of this is just tied to wages going down or

stagnating while inflation takes off?

Thanks for the thread, Godhumor.

[hunter]

5. Throw a few galley slaves to the sharks...

... and the rest of them row harder and complain less.

Productivity!!!

[No Elephants]

6. People doing more work for less money bc they are terrified of unemployment--and unions

have been weakened.

look for health--and productivity to decline within a year bc people cannot keep it up indefinitely. Also look for declines in other spheres, like volunteering, quality of parenting, etc.

Like rubber bands, people can be stretched, but not infinitely or forever, and not without damage to the "stretchee."