May 7, 2008


Productivity Shows Resilience (Brian Blackstone, 5/07/08, WS Journal)

U.S. productivity started the year on surprisingly firm footing thanks to a big jump in manufacturing productivity, suggesting U.S. firms are adjusted quickly to the economic slowdown by shedding workers and cutting back on hours worked.

Labor costs, meanwhile, grew at their slowest annual pace in four years, which should provide some relief to Federal Reserve policymakers that the foundations for noninflationary growth remain in place despite a severe housing slump and record-high energy prices.

U.S. Worker Productivity Increases More Than Forecast (Courtney Schlisserman, 5/07/08, Bloomberg)
U.S. worker productivity in the first quarter unexpectedly accelerated as companies cut payrolls and hours worked to reduce costs during the weakest pace of economic growth in seven years.

Productivity, a measure of efficiency, rose at a 2.2 percent annual rate after a 1.8 percent gain the fourth quarter, the Labor Department said today in Washington. Labor costs climbed at a 2.2 percent pace, down from a 2.8 percent increase in the last three months of 2007.

Slowing sales and soaring expenses for raw materials like fuel prompted companies to trim staff hours by the most in five years last quarter. The weakening job market will probably keep a lid on increases in pay, indicating there is little risk that escalating wages will boost inflation.

...nearly every job is a boondoggle.

Posted by Orrin Judd at May 7, 2008 8:24 AM
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