The productivity of United States workers in the third quarter of this year dropped at a rate of around 5.2 percent, the Dept. of Labor said this Tuesday.
Output increased by 1.8 percent between July and September while the amount of hours worked went up by 7,4 percent. The figures are seasonally calculated and annualized.
From Q3 of 2020 to Q3 of 2021, nonfarm business productivity went down by 0.6 percent. This four-quarter rate is the deepest decline since the fourth quarter in 1993, when the measure also went down by the same amount.
Economists had forecasted that productivity would go down by 4.9 percent, an uptick from the preliminary number of five percent.
Unit labor costs went up by at a yearly number of 9.6 percent in Q3 of 2021, reflecting a 3.9-percent boost in hourly compensation and the lowering in productivity. Unit labor costs went up by 6.3 percent over the past four quarters.
That was over the expected numbers. Analysts surveyed by Econoday had forecasted that unit labor costs went up by 8.3 percent, which was the amount in the preliminary report.
The government finds the unit labor costs as the ratio of hourly compensation compared to labor productivity. Boosts in hourly compensation usually increase unit labor costs and raises in productivity also usually lower them.
Labor productivity, or output for each hour, is calculated by dividing an index of true output by the index of hours worked all workers, including proprietors, employees, and unpaid family employee.
In Q3 of 2021, both hours and output worked increased for the fifth quarter in row after historic declines in those measures during the spring of 2020. The output index is currently at 1.8 percent over the level seen before the covid pandemic hit.
This historic decrease in productivity is in part due to the overwhelmingly generous unemployment payments that Democrats gave out during the first days of the pandemic. This was followed up with the agenda of Universal Basic Income, that Democrats hoped would win them elections.
Author: Blake Ambrose