Thursday, December 3, 2009

The BS in the BLS Reports 8.1% Gain in Productivity

Super macro-aggregated numbers are among my least favorite pieces of data. So I am taking with a big grain of salt the Bureau of Labor Statistics number out today that reports an 8.1% gain in labor productivity in the third quarter and mean big grain.

Before detailing the number, I want to emphasise my suspicion of this number by noting that Alan Greenspan in his autobiography, The Age of Turbulence, shows that the BLS completely missed the productivity gains, in the 1990's, of the personal computer.

Here goes:

Nonfarm business sector labor productivity increased at an 8.1 percent annual rate during the third quarter of 2009, the U.S. Bureau of Labor Statistics reported today. This was the largest gain in productivity since the third quarter of 2003, and reflects a 2.9 percent increase in output and a 4.8 percent decline in hours worked. (All quarterly percent changes in the release are seasonally adjusted annual rates.)

So note what you have here. Climbing unemployment, with the same number of dollars floating around in the economy, almost by definition "productivity" goes up. In fact, since the government pumps so much money into Goldman Sachs and their bonuses appear to be on track for $700, 000 plus per employee, messenger and window washer, if you really wanted to get productivity going, President Obama could make it even more onerous for firms to hire and maintain workers, so that by the end of Q4 only Goldman people would have a job and labor productivity would go through the roof. I mean through the roof. (Even if every that is laid off suddenly panics and begins holding huge cash balances.) That is, of course, if you consider Blankfein playing footsie with Obama and Geithner labor, as opposed to what it is, a sick act, performed in a dungeon (the tombs of the Treasury).

No comments:

Post a Comment