The Bureau of Labor Statistics (BLS) released its quarterly “Productivity and Costs” report on May 5th, vouching for a 7.5 percent decrease in nonfarm performance– the fastest drop seen since the 3rd quarter of 1947.
The BLS report vouches for 2 synchronized patterns that have actually ended up being manifest in the most current monetary quarter. On one hand, overall hours worked increased by 5.5 percent since Q4 2021. Overall hours worked exceeded the level of Q4 2019, a very first since the arrival of the CCP (Chinese Communist Party) virus and subsequent lockdowns in Q1 2020.
At the same time, the output index decreased by 2.4 percent since Q4 2021. While this is still 3.5 percent higher than the level of Q4 2019, the considerable quarter-to-quarter decrease integrated with a denominator of more hours worked led to a major decrease in the measured efficiency of labor.
Non-farm performance is a metric of labor worth determined “by dividing an index of real output by an index of hours worked by all persons,” according to the BLS. Therefore, the combined impact of more hours worked and less output lead to a remarkable drop-off in labor performance of 7.5 percent.
This 7.5 percent plunge in non-farm performance is the fastest quarterly decrease in the metric since the decrease of Q3 1947, the conclusion of which accompanied the passage of the Labor-Management Relations Act of 1947. This law, much better called the Taft-Hartley Act, reduced the power of unions in the United States, and it is most likely that this legislation was partly responsible for greater non-farm performance in subsequent quarters.
One abnormality to the BLS non-farm efficiency finding was the production sector, which reported greater efficiency in the most current quarter. This is attributable to a 5.7 percent quarterly boost in overall output, enough to balance out the 5.1 percent boost in hours worked.
The report likewise noted an 11.6 quarterly percent boost in labor expenses, producing a yearly boost of 7.2 percent– the greatest yearly boost because Q3 1982.
The background for these findings is a quarterly decrease in the overall financial output: In 2022’s first financial quarter, financial output contracted by 1.4 percent, after a year of rapid economic development. If the pattern continues into Q2 2022, the U.S. economy will formally remain in a state of economic downturn. The uncommon patterns in the labor market, supply chains, and inflation all suggest an economy that has yet to get back to normalcy since the shock of the CCP virus, with the labor market showing complex and long healing from an unprecedented, unplanned experiment in mass joblessness at the start of the lockdowns over 2 years ago.
H/T The Epoch Times