Oh oh. Labor costs exceed forecasts stocks drop. time for a pay cut

[EV_Ares]

CEO needs a pay raise and workers too expensive, needs a pay cut; Wall Street concerned.

Productivity Rises 1%, But Labor Costs Exceed Forecasts

U.S. worker productivity grew at a slower pace than initially estimated during the first three months of this year as the economy just inched ahead, driving up labor costs and backing Federal Reserve sentiments that inflation is indeed a concern.

The Labor Department reported Wednesday that non-farm productivity, a measure of how much any given worker can produce in an hour, advanced at a 1.0 percent annualized pace during the first quarter of this year, driving up unit labor costs by 1.8 percent.

Economists polled ahead of the Labor Department report had revised down their forecasts for productivity, expecting non-farm productivity to advance by 1.1 percent and unit labor costs to rise by a bigger 1.2 percent after the government reported scant gross domestic product growth of just 0.6 percent during the first quarter.

http://www.cnbc.com/id/19067350

[hatrack]

1. Nothing here that a few more mergers and a few hundred thousand layoffs can't cure!

Depend on it!

[katsy]

2. Labor costs exceed....

code for more outsourcing.

[On the Road]

3. A Number of Years Ago

my employer, a large corporation, made an announcement to the following effect:

The executives didn't think we could reach the level of earnings that justified the stock price to Wall Street, so everyone had to work really hard to try to make up the difference.

Hint: If you can't make earnings, the interpretation is not that everyone has to work harder. It means that THE STOCK IS OVERPRICED!

[DavidDvorkin]

4. It is indeed time for a pay cut

At the top. Huge cuts.