Back on July 23 (before the Q2 numbers came out) we noted:
....Ummm, speaking of productivity, this can't be good. From the Federal Reserve Bank of St. Louis' FRED database:
The chart is interactive (mouse-over) but even just eyeballing it, it looks like Q1 2022 down -7.3% is the biggest fall in productivity in 75 years.
Someone should alert the media.
This is very, very bad for real wealth production by the economy. There are only two factors that matter for GDP: population growth and productivity of the population. And it is only productivity that raises per capita GDP.
It appears the media have been alerted.
From Reuters:
U.S. worker productivity in the second quarter fell at its steepest pace on an annual basis since 1948 when the Labor Department began tracking it, while growth in unit labor costs accelerated, suggesting strong wage pressures will continue to help keep inflation elevated.
Nonfarm productivity, which measures hourly output per worker, fell at a 2.5% pace from a year ago, the department said on Tuesday. It also declined sharply in the second quarter at a 4.6% annualized rate, after having declined by an upwardly revised 7.4% in the first three months of the year.
Economists polled by Reuters had expected productivity would decline at a 4.7% rate in the April-June period.
Large shifts in the composition of the U.S. workforce in the wake of the COVID-19 pandemic have made it harder to measure underlying productivity growth, which some economists put at about 1.0% or less, making the Federal Reserve's fight against inflation more difficult....
....MUCH MORE
HT: The Blind Spot which also looks at French and German rivers during the drought. Coinbase, French nukes and MUCH MORE
