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Bleak Prospects for Further Economic Growth

Gary Shilling — Wed, 22 Dec 2010 12:00:00 EST

Filed under: Forecasts, Newsletters, Economic Data, Housing

In projecting U.S. GDP growth at about a 2% rate for the remainder of this year and in 2011, I have noted that the two propellants of growth so far in this economic recovery -- the inventory revival and fiscal stimuli -- are largely exhausted.

But are there other sectors of the economy that might serve as the backbone of any meaningful economic recovery? I don't see any, especially with U.S. consumers continuing their saving spree, repaying debts and remaining hesitant to spend like they did during the boom times of earlier years.

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U.S. Productivity, Increased Efficiency Continue to Aid Corporate Bottom Lines

Joseph Lazzaro — Wed, 24 Nov 2010 18:00:00 EST

Filed under: Forecasts, Economic Data

An excellent interpretative report by Bloomberg News Friday summarized the two-edged sword nature of continued U.S. productivity growth, and it's one investors should review.

Here's the low-down:

U.S. worker productivity, which increased 1.3% in the third quarter, is creating even-more-lean U.S. corporations. Productivity has also risen at an impressive 3.4% annualized rate over the past five quarters.

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U.S. Productivity, Increased Efficiency Continue to Aid Corporate Bottom Lines originally appeared on BloggingStocks on Wed, 24 Nov 2010 18:00:00 EST. Please see our terms for use of feeds.

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U.S. Worker Productivity Continues to Impress

Joseph Lazzaro — Thu, 03 Jun 2010 16:00:00 EST

Filed under: Good news, Employees

Financial crisis or not, fragile economic recovery or not, there has been one constant in the past and current economic cycles: productivity.

Worker productivity rose an impressive 2.8% in the first quarter, the U.S. Labor Department announced Thursday. That's down slightly from the previously-released 3.6% rate for the first quarter, but still constitutes a 4.0% productivity gain on a year-over-year basis. Productivity rose at an annual rate of 7.8% and 6.3% in the third and fourth quarters of 2009, respectively. In 2009, productivity rose 3.7%.

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U.S. Worker Productivity Continues to Impress originally appeared on BloggingStocks on Thu, 03 Jun 2010 16:00:00 EST. Please see our terms for use of feeds.

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Productivity Data Shows Stronger-Than-Expected Growth

Mark Fightmaster — Thu, 06 May 2010 10:40:00 EST

Filed under: Economic Data

Thursday morning, the Labor Department released a couple of tidbits of news. One of these news nuggets was that productivity grew at a better-than-expected rate in the first quarter of 2010, as productivity grew at an annual rate of 3.6%. This rate of growth was stronger than the 2.5% growth the consensus expected.

While this is good news, because it indicates that corporate profits were good, there is also some bad news. The data indicates that household incomes continue to be "squeezed," which could indicate that the burgeoning economic recovery will hit some rough water.

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Productivity Data Shows Stronger-Than-Expected Growth originally appeared on BloggingStocks on Thu, 06 May 2010 10:40:00 EST. Please see our terms for use of feeds.

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Is It Time for Congress to Work Monday-thru-Friday?

Joseph Lazzaro — Mon, 15 Mar 2010 18:00:00 EST

Filed under: Politics

True, placing the words Congress and productivity next to one another can seem like a contradiction in terms.

Well, scholar Norman Ornstein of the American Enterprise Institute think tank, and as good as it gets regarding the workings of Congress and the public policy process, has an idea that just may make Congress more productive: a five-day work week.

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Is It Time for Congress to Work Monday-thru-Friday? originally appeared on BloggingStocks on Mon, 15 Mar 2010 18:00:00 EST. Please see our terms for use of feeds.

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Recession or expansion, U.S. productivity continues to soar

Joseph Lazzaro — Fri, 04 Dec 2009 16:40:00 EST

Filed under: Employees, Economic Data

Lost amid the shuffle of recent economic data points this week was one enduring trend in the U.S. economy -- and it's one that has an upside and, unfortunately a downside (at least short-term): productivity.

Worker productivity continues to increase at an astounding rate: it increased an enormous 8.1% in Q3, the U.S. Labor Department announced. What's more, productivity is up about 4% in the past 12 months. The same report indicated that unit labor costs fell 2.5% in Q3 and declined 2.9% in the past year.

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Recession or expansion, U.S. productivity continues to soar originally appeared on BloggingStocks on Fri, 04 Dec 2009 16:40:00 EST. Please see our terms for use of feeds.

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Employee productivity up close to 10%

Tom Johansmeyer — Fri, 06 Nov 2009 15:00:00 EST

Filed under: Employees, Economic Data, Recession

Work smarter not harder. Do more with less. Increase your output. Become more productive.

You've heard all this before, right? What it all means is that layoffs are coming, and the survivors are going to have to take on a hell of a lot more work, with no increase in support, resources or compensation. As cuts come, the survivors fight to survive, and succeeding means that a new benchmark is set. If you can survive without the help you used to have, it's easier to defer hiring for a while.

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Employee productivity up close to 10% originally appeared on BloggingStocks on Fri, 06 Nov 2009 15:00:00 EST. Please see our terms for use of feeds.

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Amazing video of Peter Schiff precisely calling the market

Sheldon Liber — Wed, 04 Mar 2009 17:00:00 EST

Filed under: International Markets, Forecasts, Other Issues, Bad News, Management, Rants and Raves, Market Matters, Economic Data, Videos, Recession, Financial Crisis

There are times when I have been behind the times but not like the investment gurus that laughed at Peter Schiff over the past few years as he called it like he saw it, and he happened to be spot on with his facts and his conclusions. For those that follow the blabbing of Arthur Laffer -- he in particular never looked more laughable than he does in this compilation video of his business show appearances, that has been floating around the web for a while.

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Amazing video of Peter Schiff precisely calling the market originally appeared on BloggingStocks on Wed, 04 Mar 2009 17:00:00 EST. Please see our terms for use of feeds.

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Volcker says this could be worse than the Great Depression

Zac Bissonnette — Sat, 21 Feb 2009 18:40:00 EST

Filed under: Management, Recession

Former Federal Reserve chair and current presidential adviser Paul Volcker says that the global economy may be deteriorating even more precipitously than it did during the Great Depression.

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," he said at a Columbia University luncheon. He also dismissed the notion that the financial innovation of the past decade has had any positive results: "There is little correlation between sophistication of a banking system and productivity growth."

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Volcker says this could be worse than the Great Depression originally appeared on BloggingStocks on Sat, 21 Feb 2009 18:40:00 EST. Please see our terms for use of feeds.

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Ray of Light: U.S. corporate, worker productivity continues to rise

Joseph Lazzaro — Fri, 06 Feb 2009 13:30:00 EST

Filed under: Forecasts, Good news, Employees, Economic Data

These days, most investors, executives, and economists know that there's no shortage of unpleasant news regarding the U.S. economy.

Moreover, some days it's hard to find those bright spots that we know exist amid the the snow storm of the recession. Here's one: U.S. worker productivity.

Underscoring that while there are no positives to job layoffs -- each job loss is a tragedy -- citizens and investors can at least point to the fact that the U.S. workforce is becoming more productive, and corporate efficiency is improving.

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So far, despite Fed, congressional actions, inflation remains tame

Joseph Lazzaro — Thu, 05 Feb 2009 12:45:00 EST

Filed under: Forecasts, Good news, Economic Data

Inflation -- the bane of earnings -- must always be watched, lest it rob the nation of return on investment.

Further, while the inflation hawks have been out in force, given the U.S.'s likely, record fiscal stimulus package and the Federal Reserve's doubling of its balance sheet, so far inflation remains tame.

Unit labor costs -- a key gauge of inflation, and one the Fed watches closely -- rose at a 1.8% annualized rate in Q4 2008, the U.S. Labor Department announced Thursday. Meanwhile, productivity in Q4 2008 rose at a 3.2% annualized rate.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

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Q2 U.S. productivity rises 2.2%, as hours worked decline

Joseph Lazzaro — Fri, 08 Aug 2008 09:35:00 EST

Filed under: Forecasts, Good news, Employees, Economic Data, Federal Reserve

U.S. worker productivity increased a revised 2.2% in Q2, below the consensus estimate, as companies eliminated jobs without hurting output, the U.S. Labor Department announced Friday.

Economists surveyed by Bloomberg News had expected productivity to increase 2.7% in Q2. Productivity increased 2.6% in Q1. In the past 12 months, productivity is up 2.8%.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q2 unit labor costs, a statistic adjusted for increases in efficiency, increased 1.3%. However, in the last 12 months labor costs have increased just 1.5%. Labor costs increased 2.2% and 4.7% in Q1 and in Q4 2007, respectively.

Economists surveyed by Bloomberg News had expected unit labor costs to increase 1.3% in Q2.

Q2 productivity takes some pressure off Fed

Economist Peter Dawson said the adequate Q2 2.2% productivity statistic, although below consensus, will provide argument support for doves on the U.S. Federal Reserve who want to keep interest rates as low as possible to encourage a U.S. economic recovery.

"Productivity is still rising at a healthy pace. That fact, combined will the relatively modest unit labor costs for the second quarter and year, present a picture that inflation is not getting out of control, which is good news for those seeking lower interest rates, and for business executives," Dawson said. "If these productivity and cost trends continue, hawks on the Fed are going to have a hard time making a case for an interest rate increase at the Fed's next meeting."

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U.S. today seen better-equipped to cope with oil, food price rises than 1970s

Joseph Lazzaro — Thu, 19 Jun 2008 16:17:00 EST

Filed under: Forecasts, Other Issues, Commodities, Oil

Just call it stagflation, updated for the globalization era.

Oil's record, 5-year rise, combined with increasing food costs, have increased inflation, reduced disposable income, and slowed the U.S. economy to a crawl, when combined with the effects of the end of the housing boom.

The above sounds like a prescription for a replay of the 1970s' stagflation era, but is it? Not quite, according to Stephen Cecchetti, professor of economics at the Brandeis University International Business School.

Cecchetti told Bloomberg News Thursday a more-flexible economy, with lower stockpiles of goods, increased fuel efficiency, increased worker productivity, and lower wage increases for employees are among the economic differences separating the 1970s and 2008 U.S. economies. As a result, Cecchetti doesn't see a repeat of the 1970s' high inflation/high unemployment levels.

Economist David H. Wang concurred with the above conclusion, but argued that the two major factors in the nation's enhanced ability to cope with large increases in commodity costs and other negative economic factors are energy efficiency and worker productivity.

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U.S. Q1 productivity accelerates to 2.6%, better than expected

Joseph Lazzaro — Wed, 04 Jun 2008 10:05:00 EST

Filed under: Good news, Employees, Economic Data

U.S. worker productivity increased a revised 2.6% in Q1 2008, above the consensus estimate, as companies eliminated jobs without hurting output, the U.S. Labor Department announced Wednesday.

Economists surveyed by Bloomberg News had expected productivity to increase 2.5% in Q1 2008. Productivity increased 1.8% in Q4 2007.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q1 2008 labor costs, a statistic adjusted for increases in efficiency, increased 2.2%. Labor costs increased 4.7% in Q4 2007.

Economists surveyed by Bloomberg News had expected unit labor costs to increase 1.9% in Q1 2008.

During Q1 2008, hours worked fell at a 1.8% annualized pace.

Economic Analysis: A strong productivity report. The nation's workforce continues to become more efficient, which is a good sign given increasing business costs in other areas -- raw materials, commodities, energy, and transportation costs, etc. As in 2007, for the first quarter of 2008, companies did a good job increasing productivity while containing employee costs amid sluggish business conditions.

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Dollar rallies after U.S. productivity gain, talk of Europe slowdown

Joseph Lazzaro — Wed, 07 May 2008 16:40:00 EST

Filed under: International Markets, Other Issues, Federal Reserve

The dollar rallied to a six-week high Wednesday after U.S. productivity increased at a larger-than-expected rate and sentiment surfaced that Europe's economy may have slowed considerably.

The dollar rose about 2 cents versus the euro -- a large move in the currency market -- to $1.5370 on Wednesday afternoon. The dollar also gained against the world's other major currencies, rising about 2 cents to $1.9530 versus the British pound? about 0.5 cents to $1.0555 versus the Swiss franc and about one-half yen to 104.85 yen versus Japan's yen.

U.S. productivity gives dollar a lift

Earlier in the day, the U.S. Labor Department announced that U.S. worker productivity increased at a 2.2% annual pace in Q1 2008, well above the 1.7% Bloomberg News survey consensus estimate.

Independent currency trader Andrew Resnick told BloggingStocks Wednesday the Q1 2008 productivity data, combined with a sense that the European Central Bank is behind-the-curve concerning interest rate cuts to deal with slowing economic growth, put traders in dollar-buy mode.

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Q1 U.S. productivity rises much better than expected

Joseph Lazzaro — Wed, 07 May 2008 09:30:00 EST

Filed under: Good news, Employees, Economic Data

U.S. worker productivity increased at a 2.2% annual pace in Q1 2008, above the consensus estimate, as businesses cut both jobs and worker hours to contain costs, the U.S. Labor Department announced Wednesday.

Economists surveyed by Bloomberg News had expected productivity to increase 1.7% in Q1 2008. Productivity is now up 3.2% on a year-over-year basis.

Productivity increased 1.8% in 2007 and 1% in 2006. Productivity measures output per hour worked. Economist say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q1 2008 labor costs, a statistic adjusted for increases in efficiency, increased to 2.2%, compared to a 2.8% increase in Q4 2007. Labor costs have risen just 0.2% on a year-over-year basis, the smallest increase since 2004. Labor costs increased 3.1% in 2007.

Economists surveyed by Bloomberg News had expected Q1 2008 labor costs to increase 2.2%.

Economist Peter Dawson liked the Q1 2008 productivity report, for the most part. "There is some concern about employers curtailing employee hours, but in general, the 2.2% increase in productivity is a healthy stat. U.S. workers are becoming more productive. It'll help businesses contain costs amid all other cost increases. It's a generally good report."

Economic Analysis: As Dawson noted, in general, a favorable Q1 2008 productivity report. The nation's workforce continues to become more-efficient, which is a good sign, given increasing business costs in other areas -- raw materials, commodities, energy and transportation costs, etc. Early in 2008, companies are containing employee costs, and increased productivity is contributing to this goal.

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Serious Money: Stimulate productivity not consumption

Sheldon Liber — Thu, 06 Mar 2008 15:40:00 EST

Filed under: International Markets, Rants and Raves, India, China, Market Matters, Serious Money

After recommending yesterday that our leaders should stimulate the economy by investing in infrastructure rather than mad money stimulus, and after discussing this with some business associates, I have a few more thoughts I'd like to share.

We have been hearing that 70% of our economy has been supported by the American consumer. Congress and the President have agreed on -- or colluded, depending on who you speak with -- a bi-partisan economic stimulus package. When, and if, the check arrives in the mail, there might be short-term glee among the populous. But if it is used just to stimulate more consumption, then it will only serve to postpone the pain by some time -- perhaps a month or two.

If I get anything back, I will be using it to reduce debt or invest in equity and nothing else. I hope my fellow citizens are able to understand that reducing debt or investing in equity has some value, while consuming, that is, rushing out to buy a flat-screen television or a new PlayStation, is a complete waste of a one-time opportunity.

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U.S. non-farm Q4 2007 productivity increases 1.9%, above estimate

Joseph Lazzaro — Wed, 05 Mar 2008 10:00:00 EST

Filed under: Good news, Employees, Economic Data

U.S. worker productivity increased 1.9% in Q4 2007, above the consensus estimate, as businesses reduced employee hours to contain costs, the U.S. Labor Department announced Wednesday.

Analysts surveyed by Bloomberg News had expected productivity to increase 1.8% in Q4 2007. Productivity increased 6.9% in Q3 2007.

For 2007, productivity increased 1.8%, up from 1% in 2006. Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages without increasing their per unit costs.

Meanwhile, Q4 2007 unit labor costs, a statistic adjusted for increases in efficiency, were revised higher to 2.6% from the earlier 2.1%. Labor costs increased 3.1% in 2007.

During Q4 2007, hours worked fell 1.6%, the largest decline since Q1 2003, and the second consecutive quarterly drop.

Economic Analysis: In general, a decent Q4 2007 productivity report. The nation's workforce continues to become more-efficient, which is a good sign, given increasing business costs in other areas -- health care insurance, raw materials, commodities, energy and transportation costs, etc. In 2007, companies did an adequate job containing employee costs.

U.S. non-farm Q4 2007 productivity increases 1.9%, above estimate originally appeared on BloggingStocks on Wed, 05 Mar 2008 10:00:00 EST. Please see our terms for use of feeds.

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U.S. productivity increases in Q4 well above estimate

Joseph Lazzaro — Wed, 06 Feb 2008 09:45:00 EST

Filed under: Good news, Employees, Economic Data

U.S. worker productivity increased more than forecast in Q4 2007, as businesses cut back employee hours at the fastest pace in about five years, the U.S. Labor Department announced, in a statement.

Productivity increased at an annualized rate of 1.8% in Q4 2007, well above the 0.5% consensus estimate. Productivity increased 6% in Q3 2007.

For 2007 productivity increased 1.6%, after rising 1% in 2006.

Unit labor costs increased 2.1% in Q4 2007 after declining 1.9% in Q3. Hours worked declined 1.5%. Compensation for each hour worked increased at an annualized rate of 3.9%. For 2007, labor costs increased 3.1%, the highest since 2000.

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Asian manufacturers adjusting to American economic downturn

Gary Sattler — Fri, 25 Jan 2008 15:00:00 EST

Filed under: Forecasts, Products and Services, Industry, Consumer Experience, China, Japan, Personal Finance

Asian manufacturers, especially those in China and Japan, are beginning to feel the pinch from weak purchasing power here in the United States. A report in the New York Times highlights some of the attitudes and adjustments which shall be guiding world industrial output going through this year and into 2009. Prudent cuts are being made by Asian manufacturers across the board to offset costs, while demand growth is in decline.

It's not all doom and gloom however, depending on how you look at it. Chinese economists are actually feeling a bit of a relief from the slowdown in the face of their own inflationary pressures and indications are that merchandise inventories aren't yet getting bloated. This means that while industrial output might be cooling in the near term, available manufacturing capacity should remain relatively flush while the banks figure out the details of stinging money supply issues.

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