Slowing Productivity Is Great News For Unemployed Americans

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		Home Tech Finance Markets Politics Strategy Entertainment Advertising Retail Sports Life Friday, February 15, 2013 Slowing Productivity Is Great News For Unemployed Americans One of the most troubling aspects of the current economic recovery has been the lagging labor market recovery. Since the recession, corporations have been operating on extremely lean cost structures and low employee had counts.  These productivity gains manifested in the form of surging corporate profits on modest revenue gains. However, the latest economic data suggests productivity gains may have topped out.  Deutsche Bank economists Carl Riccadonna and Joseph LaVorgna write that this is good news for hiring. From their note (emphasis ours) ...The decline in productivity (-2.0% in the quarter) is the largest drop since the economy was in sharp contraction in late 2008. Productivity has risen just +0.6% over the past four quarters—well below its long-term average of approximately 2.1%. While slowing productivity over a broad time horizon is a troubling prospect for the economy, in the short term it is positive news for the labor market. In a low productivity environment, economic growth coincides with a faster pace of job creation. We see little reason to believe that at this point the productivity slowdown is anything more than a typical cyclical development... ...The second chart shows how a broad productivity growth deceleration has coincided with faster hiring in the current economic cycle. A pace of hiring in excess of “steady state” (which is approximately 100k to 125k per month) will lead to intensifying pressures in the labor market and should result in a more pronounced downtrend in the unemployment rate. However, faster hiring may not be apparent in the February labor, due to distortions from the recent Northeast snowstorm... Here's the chart: Read » Also On Money Game Today: STOCKS GO NOWHERE AFTER WAL-MART SURPRISE: Here's What You Need To Know FINANCIAL ADVISOR INSIGHTS: Brokers Love To Switch Firms On Long Weekends Advertisement CHART OF THE DAY: Global Gold Demand Is Falling CHART OF THE DAY: Why Buying An Old Home Is A Bad Investment CHART OF THE DAY: Investors' Attitudes Toward Corporate Cash Hoards Have Made A Major Bullish Shift Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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