U.S. productivity falls for the first time since 2015. Another victim of China trade war?

[Zippyjuan]

https://www.marketwatch.com/story/u...he-first-time-in-almost-four-years-2019-11-06

More "winning".

The numbers: The productivity of American workers fell in the third quarter for the first time in almost four years, reflecting a cutback in production as the U.S. economy slowed toward the end of summer.

Productivity declined at a 0.3% annual rate from July to September, the government said Wednesday. It fell a somewhat smaller 0.1% among American manufacturers.

Economists surveyed by MarketWatch had predicted a 0.6% increase in productivity.

The drop in productivity might be just temporary if the economy speeds up again, but it could also be a warning sign. Businesses reduced production in response to softer demand, especially for exports. The trade war between the U.S. and China has disrupted global supply chains and contributed to a world-wide slowdown in economic growth.

Big picture: Productivity had accelerated in the past several years as companies boosted investment, punctuated by large 2.8% and 3.6% gains in the first two quarters of 2019. Yet the trade war with China has thrown a wrench in corporate-spending plans. It could be a problem for the U.S. economy if the trade war persists.

Without more business investment, productivity might backslide. That’s not good for workers or businesses. Higher productivity is the key to a rising standard of living, resulting in higher pay, more profits and low inflation.

Low productivity is a sign of an inefficient economy. Productivity in the U.S. has risen at an average rate of just 1.3% since 2007, compared with a 2.1% average since the end of World War II.

More at link.

 

[Swordsmyth]

It's nothing unusual:

The report showed the decline in productivity resulted from a 2.1% increase in output against a 2.4% rise in hours worked.
Driving this decline was surging unit labor costs (+3.6%) following 2.4% in the prior period...

From a year earlier, productivity rose 1.4%, down from 1.8% in the prior period. Unit labor costs were up 3.1% year-over-year, which could be a sign that a tight job market is filtering through to what companies are spending on wages.

More at: https://www.zerohedge.com/economics/us-productivity-plunges-most-2015-unit-labor-costs-surge


Workers are being paid more and that's a problem?

 

[tebowlives]

And why is the China trade war hitting just now? A predicted .6 growth turns into a .3 decline. So why didn't these same people see that coming?

 

[oyarde]

I have been at war with china a lot longer than since 2015. Anyone making such low quality goods deserves to have war made on them . Chicoms.

 

[Swordsmyth]

I have been at war with china a lot longer than since 2015. Anyone making such low quality goods deserves to have war made on them . Chicoms.

You are a great American and an example to us all.

 

[phill4paul]

All manufacturing is hiring in my area. The fiber optics company I work for still has mandatory O.T. because they cannot find workers. Starting is $14. $18, 6 months later. $22 1 yr. after that. we're a third rate company. Not SieCor or Alcatel. Still it's not bad. Gainshare about $1500 a year. $1k a year retention bonus. 2 wks. vaycay. 3 sick days. 15 or so Holiday pay. Up to a week bereavement. Not terrible at all.
So busy we have to work Thanksgiving day and eve.
And this during out "down-time."
So come on out and get yourself hired.
We aren't the only one. Plenty to apply for.
Unless you want to work at McD's, make minimum, and bitch that you need a "living wage."

 

[Swordsmyth]

[h=2]Real Productivity Decline, 10 Simple Explanations[/h]

1. The internet boom and the rising productivity associated with it were very real. The rate of change in internet-related improvements has fallen since 2000.
   
2. Decreasing marginal utility of robots.
   
3. The Fed’s easy money policies sponsored numerous corporate zombies. Those zombies survive only because of ultra-easy financing. Zombie companies are unproductive, by definition. Things are even worse in the EU because of negative rates.
   
4. The Fed’s easy money policies also sponsored a “store on every corner”. There are far more retail stores, restaurants, fast food establishments, and outlet malls than needed.
   
5. Marginal stores have to be manned by somebody and they are, by increasingly marginal employees as the unemployment rate declines.
   
6. Demographics. As skilled workers retire, those workers are replaced by workers with lower skills.
   
7. Health issues in general. Obesity and drug-related issues are on the rise as are time off for those reasons.
   
8. Militant unions demand and receiving unwarranted pay, time off, and control over workplace conditions.
   
9. Corporate buybacks mainly benefit CEOs and executives who cash out their shares and options. It takes careful investment, not reckless expansion, not buybacks to have productivity gains.
   
10. It’s the debt, stupid. Fiscal deficits are totally out of control. Interest on the national debt by itself is $574 billion. What are we getting for it?

More at: https://www.zerohedge.com/economics/10-reasons-why-productivity-declining