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US Labor Productivity Does Something It’s Never Done Before
While previewing this week's deluge of key data out of the world's largest economy, I exhorted readers not to ignore the update on productivity and unit labor costs.
Those figures aren't the stuff headlines are made of, but they do matter for the macro, particularly in the current environment. Sure enough, they moved in the wrong direction during Q1.
Productivity dropped 2.7%, well worse than the 2% decline consensus expected, Thursday's release showed. The range of estimates, from more than t
Labor productivity, charted quarterly from 1990, looks like it has receded back to the long-term growth trendline after a sharp jump in 2020 and a slow easing in 2021-2023 YTD. https://data.bls.gov/servlet/SurveyOutputServlet?request_action=wh&graph_name=PR_lprbrief
I think this data now emphasizes manufacturing industries. A change in data collection or methods? I don’t find confirmation/explanation on the BEA site but I looked at the data “by detailed industry”, labor productivity for service industries uniformly went to “N.A>” in 2022. https://www.bls.gov/productivity/tables/labor-productivity-detailed-industries.xlsx Maybe data for service industries is inferred at a sector level, but I wonder how reliable it is.
It looks like my comment on the Lagarde post was in the wrong place. I seem to have anticipated a bit.