US Labor Costs Jump, Productivity Underwhelms In Bad Inflation Omen
In an incrementally discouraging development for US policymakers, the first estimate of Q1 labor productivity undershot expectations and unit labor costs rose more than expected.
Thursday's BLS release, which included recent revisions, won't get top billing across the financial mediascape, but it's relevant all the same.
Higher productivity is one way (the best way) to sustain robust growth outcomes without unacceptably high inflation. Jerome Powell talked at some length about that during Wedn
Perhaps AI will come to the rescue. But . . . if an AI agent replaces a human employee, does the agent’s output get counted toward employee productivity? For example, “Multifamily rental marketplace Apartment List announced that it would provide its advanced GenAI leasing agent Lea Pro to property management partners at no cost”. https://www.globest.com/2024/05/02/what-happens-when-an-advanced-leasing-agent-becomes-free If a property manager uses Lea Pro instead of human leasing agents, how does that show up in BLS data?
Probably. Isn’t it simply aggregated data of output/number of employees?
I wish I understood better how the BLS methodology will handle a technological innovation that 1) increases revenue with fewer employees, or 2) leaves revenue unchanged but decreases expense thus increases profits with fewer employees.
I don’t think that profits are accounted for. Simple output/# employees. Yes, I should verify that…
So, Investopedia says “Economic productivity is calculated as a ratio of gross domestic product (GDP) to hours worked.”
So hours worked, not the number of people working as I suggested.