US Economy: Worker Productivity Increases More Than Forecast

May 7, 2008


An except as reported on

May 7 (Bloomberg) — U.S productivity unexpectedly accelerated in the first quarter, helping combat inflation, as job cuts meant the remaining employees did more work.

Productivity, a measure of worker efficiency, rose at a 2.2 percent annual rate after a 1.8 percent gain the prior quarter, the Labor Department said today in Washington. A separate report showed pending sales of existing homes fell for the fourth time in five months, signaling no end in sight to the housing recession.

Federal Reserve policy makers anticipate that the economic slowdown and weakening job market will contain consumer prices, and today’s figures may bolster their case. Companies trimmed staff hours by the most in five years last quarter as they tried to cope with the housing-led economic downturn, the data showed.

“Productivity is solid and labor costs are slowing and this will take the pressure off inflation and the Federal Reserve,” said Mark Zandi, chief economist at Moody’s in West Chester, Pennsylvania. “Unit labor costs have essentially come to a grinding halt and that should support corporate profits and allow businesses to hold the line on prices.”

Our Perspective:

Seems like there is always a silver lining!

Unemployment rates are up and the remaining forces are working harder because they are probably just as scared about losing their jobs.

The middle class squeeze!

We deserve better and we should be working to insure that everyone has an opportunity to make a good and fair wage. There is always a lot of rhetoric. It is time to take steps to correct the mistakes of the past and offer everyone the opportunity for a brighter future.

It is all within our grasp. We just have to change the way we view things and place ourselves in each situation.

Then what would be your next step?

Is it fair to all concerned?

Let us know your thoughts? You may email

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