As I work on another long essay on ... more human horseshit ... I thought I'd pass along this little economic update from the Wall Street Journal (February 6, 2014).
It must be read and understood in the context of the productivity/wage graph I've included below. I'm going to use that graph in the introduction to my next essay. I've emphasized the key items. Read it and weep.
U.S. Productivity Rises at Healthy 3.2% Clip in Fourth Quarter
By Jonathan House
Updated Feb. 6, 2014 12:59 p.m. ET
WASHINGTON — The productivity of U.S. workers rose at a healthy pace in the fourth quarter, a reflection of broad economic strength at the end of last year.
Nonfarm labor productivity, or output per hours worked, rose at a 3.2% annual rate from October through December, the Labor Department said Thursday. It rose at an upwardly revised 3.6% rate in the third quarter.
The productivity readings for the two final quarters of 2013 were the strongest since late 2009, offering hope that productivity hasn't permanently downshifted, as some had feared. Lower productivity would suggest lower economic growth over the long term.
Such fears "have probably been alleviated," said Omair Sharif, an economist at Royal Bank of Scotland. Mr. Sharif cautioned that the second-half productivity numbers might have gotten a temporary boost from inventory accumulation and strong exports. Adjusting for that effect, he estimates the gains might be closer to the 1.8% average annual rate for the past 28 quarters.
The productivity gains helped underpin the strongest second-half growth for the economy in a decade. Gross domestic product, the broadest measure of goods and services produced in the economy, grew at a seasonally adjusted annual rate of 3.2% in the fourth quarter and by a 4.1% pace in the third quarter.
Productivity rose strongly in 2009 and 2010, as businesses scarred by the recession held off hiring even as the economy recovered. Instead, they attempted to squeeze more output from existing workers. But for much of the rest of the recovery, productivity had barely risen at all.
The rise in fourth-quarter productivity, coupled with subdued wage growth, resulted in a 1.6% decline in labor costs.
Over the same period a year earlier, fourth-quarter labor costs fell 1.3%, though the measure is skewed by the accelerated payment of bonuses at the end of the 2012 because of tax changes.