Courtesy of Mish
The BLS report on preliminary Productivity and Costs, Second Quarter 2017 shows nonfarm business productivity increased 0.9 percent during the second quarter of 2017.
Productivity is defined as “real” inflation-adjusted output divided by aggregate hours worked.
The quarterly number is very good, but revisions were massive and the overall trend is dismal. More importantly, the measurement is FUBAR. First, let’s dive into the report.
Labor Productivity and Unit Costs
Supposedly, the charts are seasonally adjusted, but the second chart on unit labor costs suggests something is seriously wrong. Alternatively, or additionally, there are lots of data-gathering flaws.
Revisions
In regards to the possibility of data gathering flaws, let’s consider real hourly compensation revisions.
Year-Over-Year Productivity – Real Output Per Hour
