The latest jobs report from the government isn’t good, so it’s a good thing there…
The latest jobs report from the government isn’t good, so it’s a good thing there is also some encouraging news to report.
According to the Labor Department, nonfarm business sector labor productivity increased 3.4 percent in the first quarter of 2019, as output increased 3.9 percent and hours worked increased 0.5 percent.
While this may sound dry and uninteresting, the fact is labor productivity has a lot more to do with strong economic growth, historically, than even unemployment stats do.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.
Unit labor costs in the nonfarm business sector increased just 2.7 percent in the first quarter of 2018, reflecting a 3.4-percent increase in hourly compensation and a 0.7-percent increase in productivity.
So, productivity gains in the first quarter of 2019 were significantly stronger than those posted during the same three months last year. It’s quite an improvement.