This is pretty amazing, really:
Nonfarm business sector labor productivity increased at a 9.5 percent annual rate during the third quarter of 2009, the U.S. Bureau of Labor Statistics reported today.
That's a stunning number. But you better pay attention to what this means:
Output increased 4.0 percent and hours worked decreased 5.0 percent in the third quarter of 2009.
Got it? Here's the bottom line:
From the third quarter of 2008 to the third quarter of 2009, nonfarm business output fell 3.5 percent and hours worked fell faster, 7.5 percent, resulting in a productivity increase of 4.3 percent (tables A and 2). The four-quarter decline in hours was the largest in the series, which begins in 1948.
Here was the mantra from employers:
Work harder, get paid for fewer hours, OR GET FIRED!
This sounds great if you're an employer, but as an employee, or wanna-be employee (that is, you're unemployed)?
Then it's horrible, as the better the productivity of existing workers, the less likely it is that you, dear reader, will be able to find a job, as the wall of output has yet to meet the wall of exerted labor.
This also means that per-unit of output, labor is reaping less in wage, which in turn means that per unit of output there is less in disposable income available to purchase it.
Yeah, the futures liked that report, "amped" by the CNBC liars parade - it's "great" that companies are squeezing the employee and getting better profits out of smaller labor inputs, right?
Exactly who is it that buys the output of those firms, and with what do they purchase it? On a forward basis what will this mean for consumption - and eventually, both production and sales?
