August 27, 2003

Note: Productivity in the Third Quarter

If seasonally-adjusted hours worked in August and September just equal those in July (a reasonable bet for August at least), then labor input in the third quarter of 2003 will be 0.4% below labor input in the second quarter of 2003--labor input will be falling at a 1.6% annual rate.

That means that a third-quarter seasonally-adjusted growth rate of 4% per year would be associated with a productivity growth rate of 5.6% per year...

Posted by DeLong at August 27, 2003 09:41 AM | TrackBack


August 27, 2003

Labor market left behind
By Jared Bernstein and Lawrence Mishel

Although the recent recession was officially declared over as of November 2001, on Labor Day 2003 the job market remains decidedly weak. Unemployment is high and, instead of coming down in the nascent recovery, it has climbed from 5.6% at the recession's end to 6.2% in July 2003 (the most recent data available). Tracking the nation's payrolls reveals the worst hiring slump since the Great Depression. And the weak labor market is not just a problem for those without jobs—wages have been growing more slowly for most workers and even falling in real terms for some....

Posted by: anne on August 27, 2003 10:33 AM

Q3 GDP 4% ? Try 5 plus !

Posted by: 49eels on August 27, 2003 12:27 PM

Too bad we can't get at this the other way around. If we had an actual measure of productivity change (available quickly), then we could know about the labor implications. Instead, Brad is using an estimate of labor hours to come up with a productivity figure. That is not very satisfying for a number of reasons. For instance, I think the BLS has me down for roughly 35 hours a week. That barely covers my weekend hours (ok, subtract 15 hours for visits here).

Posted by: K Harris on August 27, 2003 12:32 PM

Weak demand constrains job growth

Many commentators have argued that the biggest obstacle to job growth in this recovery period is the fact that productivity is growing quickly. In reality, it is weak demand by consumers and investors—not a rapid growth in productivity—that is holding back job growth....

Productivity growth in the recovery has been only slightly (0.3%) above the average of that of the past eight expansions. Employment growth, on the other hand, has been much stronger in past recoveries (3.3% versus -0.5%)....

Posted by: anne on August 27, 2003 12:35 PM

Weak Demand Growth ??? Houses, Cars, Durable Goods, Government Spending (Defence AND Non-Defence) ! Pretty hard to get 5% plus GDP growth without very solid DEMAND !

Posted by: 49eels on August 27, 2003 12:41 PM
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