Worker Productivity Drops in Q1 and Effects on the Labor Market
I am having a hard time putting a smiley face on this article from CNNMoney.com:
. . . . Worker productivity in the first quarter was much lower than original estimates, according to a government report Wednesday . . . . Productivity increased by 1.0 percent in the quarter, down from the original estimate of a 1.7 percent gain
. . . . the slower productivity raised inflation concerns, as the unit labor costs rose 1.8 percent in the quarter, up from the 0.6 percent rise in the original estimate.
On the labor front, U.S. employers announced plans in May to eliminate 71,115 jobs, up 32 percent from May 2006 when job cuts totaled 53,716, Reuters said.
It was the second consecutive month in which job cuts increased from the same period a year ago, according to the monthly job-cut report released Wednesday . . . .
Still, year to date, the pace of job cutting remains below last year's level, but the gap is rapidly closing. Heavy downsizing in the computer industry dominated May job cuts, Reuters said.
"Heavy job cutting in the computer industry reflects a slowdown in business spending on new technology. We may continue to see heavy cuts in the months ahead with spending expected to remain soft in the near future," John A. Challenger, chief executive officer at the Chicago-based firm, told Reuters.
An issue that is not being addressed are the job cuts in the housing industry. Admittedly, it is difficult to measure the loss of jobs in the construction trades because many of these people are self-employed. Or real estate sales portion of the business where the real estate agent just gets another job and doesn't perform as a full time agent any longer. But the job losses do exist. Also the mortgage departments of banks and mortgage companies must start laying off if the haven’t already started.
Nothing personal it is just business.