Here are a few stats concerning US Productivity and US GDP in early 2008
US productivity rose at an annualized rate of 2.2 per cent in the first quarter
- Much more than economists thought
- Strong productivity is seen as an important factor to inflation. If Productivity is high then that means that those costs are not being passed on to the consumer
- The Federal Reserve watches Productivity to maintain make sure a price spiral doesn’t occur
- The amount of labor needed to produce the Productivity number has declined by 1.8% (number of labor hours worked)
- Productivity for all of 2007 – 1.8%
- Productivity for all of 2006 – 1.0%
- American borrowing increased from 3.1% in February to 7.2% in March
GDP for the first quarter of 2008 is 0.6% (revised to 0.9%)
- Economists thought it would be 0.5%
- Anything below 2.5% GDP for a sustained period of time will result in labor contraction (0.6% for two quarters in a row now)
Working Thoughts 