Courtesy of Mish.
Productivity is down 1% in the first quarter of 2016 following a revised 1.7% decline last quarter.
This is the fourth productivity decline in the last six quarters.
Meanwhile unit labor costs are up 4.1% in the first quarter following a revised jump of 2.7% in the fourth quarter of 2015.
The Bloomberg Econoday consensus was -1.2% for productivity and +3.5% for labor costs.
Highlights
The nation’s output is slowing despite an increase in hours worked in what is the latest signal of structural weakness for the economy. Productivity fell at an annualized 1.0 percent rate in the first quarter for the 4th decline of the last six quarters.
Output inched only 0.4 percent higher in the quarter despite a 1.5 percent rise in hours worked. Weak output makes for unwanted increases in unit labor costs which jumped 4.1 percent in the quarter for the largest gain since fourth-quarter 2014.
Trouble in output and productivity reflects what have been declines in spending on capital goods, evident in last week’s first-quarter GDP report where the business investment component posted its second straight drop. Employment may be strong but the productive capacity of each additional worker is on the decline.
Productivity Trends
Productivity vs. Labor Costs
