Friday, September 04, 2009

The Jobless Recovery

from the WSJ:

"The economy is experiencing another huge increase in productivity in the third quarter. Nonfarm labor productivity grew at an annual rate of 6.6% in the second quarter. Look for something in that eye-popping range for the current quarter. Here’s a rough sketch of the numbers: Today’s jobs numbers showed that the Labor Department’s index of aggregate hours worked by Americans was at 98.9 in August, down steeply from a second quarter average of 99.7. That’s from a combination of job cuts, reductions in overtime and other cuts to work shifts. Let’s assume there’s no change in hours worked in September. That would mean the total amount of hours that Americans worked in the third quarter would be down at about a 2.8% annual rate. The economy seems to be on track to grow at an annual rate of 3% or more. More output and fewer hours worked means more productivity in the neighborhood of 6%. You’ll be hearing a lot of talk about a jobless recovery in the months ahead. The upside is that this is good for corporate profits. The downside is that workers will suffer even after the economy comes back."



Anonymous said...

creative destruction baby

kebko said...

Since teenage unemployment is very high & there are minimum wage increases, isn't this just a statistical artifact of keeping the least productive workers unemployed?

Anonymous said...

So if I am reading this correctly, if we can leave our investments in stocks alone, (as in not having to cash them in when the unemployment runs out), they might be worth something again, but do not look to go back to work because they finally figured IT out, THEY DO NOT NEED MANY OF US ANY LONGER.