Fed Gets More Good News In Under-The-Radar Macro Release
US labor productivity rose the most in almost three years in Q2, data out Thursday showed.
Market participants tend to ignore this release, or if that's too strong, it's fair to suggest it often gets short shrift. That's too bad. Because it's relevant. And eminently so in the current macro environment.
The 3.7% jump for Q2 blew away estimates, and came courtesy of a 2.4% increase in output and a 1.3% decline in hours worked. The latter represented the first drop since 2020.
Measured against
Reading between the lines, I wonder if the increase in productivity is, in part, due to a return to “work at the office”, as “working from home” gets phased out/minimized?
I work more at home than I did at the office. Furthermore, I wonder how productivity is measured for software engineering as it’s not very cut and dry so to speak.
My lay impression is that productivity is GDP divided by hours worked, as measured and estimated by the BEA and BLS. I think these metrics look at sales of final goods and services, inter-industry sales of intermediate goods and services, compensation, taxes paid, operating surplus, etc. Page 3 of the third link has some sort-of-understandable examples. They aren’t trying to count lines of code produced 🙂
https://www.bls.gov/productivity/technical-notes/output-measures-major-sector-productivity.pdf
https://www.bea.gov/system/files/papers/P2006-8.pdf
https://www.bea.gov/sites/default/files/methodologies/industry_primer.pdf#page=11