Article

2021-12-09 Economy

Another Quarter, Another Horrible Productivity Report

[BLS.gov] Nonfarm business sector labor productivity decreased 5.2 percent in the third quarter of 2021, the U.S. Bureau of Labor Statistics reported today, as output increased 1.8 percent and hours worked increased 7.4 percent. This is the largest decline in quarterly productivity since the second quarter of 1960, when the measure decreased 6.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2020 to the third quarter of 2021, nonfarm business sector labor productivity decreased 0.6 percent. This four-quarter rate is the largest decline since the fourth quarter of 1993, when the measure also declined 0.6 percent. (See table A1.)

Unit labor costs in the nonfarm business sector increased at an annual rate of 9.6 percent in the third quarter of 2021, reflecting a 3.9-percent increase in hourly compensation and a 5.2-percent decrease in productivity. Unit labor costs increased 6.3 percent over the last four quarters.
IMO, the biggest contributor to this is the supply chain problem because it results in workers sitting around waiting for parts. The second biggest contributor is covid related issues as workers take time to be in compliance with rules and have to leave production for breaks when masks make breathing a problem. The third biggest contributor is the exit of experienced workers from their jobs, either to retire or seek new jobs which scrambles production teams who require time to adjust. Anyway, this is truly horrible.

Posted by Lord Garth 2021-12-09 00:00|| || Front Page|| [15 views ] Top

#1 ...I'm a bit curious - what was going on in 2Q60 that resulted in such a drop?

Mike

Posted by Mike Kozlowski 2021-12-09 10:46|| 2021-12-09 10:46|| Front Page Top

#2 major strike by United Steelworkers Union in March 1960.

as steel became hard to get the automobile industry had difficulty keeping production up but because of union contracts a lot of workers were kept on the job unable to do much

Posted by Lord Garth 2021-12-09 11:27|| 2021-12-09 11:27|| Front Page Top

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