Early 2008 Productivity and GDP

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)


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