The U.S. Bureau of Labor Statistics (BLS) released its revised estimate of productivity and costs for the first quarter of 2014. According to this report productivity in the “Non-farm” sector fell drastically. “The decrease in productivity was the largest since the first quarter of 2008 (-3.9 percent).”
Productivity is a measure of how much stuff is produced per hour of labor (not including farming). It is “annualized” based on “seasonally adjusted” numbers.
Due in part to the drastic drop in productivity, businesses suffered a massive increase in labor costs as they increased 5.7% on an annual basis.
Manufacturing Productivity Up
Even though Non-farm productivity was down drastically (-3.5%) the decrease was limited to the “Business” sector with “manufacturing” productivity actually up 3.8% and it’s subset durable manufacturing up 4.1%. Durable goods are things that do not wear out quickly such as household appliances, cars, consumer electronics, furniture, sports equipment, firearms, and toys.
Business sector output does not include government, non-profit institutions or private households but even so it makes up 76% of the entire Gross Domestic Product (GDP).
So although business productivity was down manufacturing productivity was actually up.
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