by Mike ‘Mish’ Shedlock
Wages are up and output per hour is down. Is this the magic mix for what ails the economy?
Productivity declined 0.6%, exactly in-line with the Bloomberg Econoday consensus.
Productivity remains a key weakness of the economy and is especially evident during the low output of the first quarter. The second estimate of first-quarter nonfarm productivity came in at a quarter-to-quarter annualized decline of 0.6 percent. Output during the quarter rose 0.9 percent but the increase was outmatched by a greater increase for hours worked, up 1.5 percent. Not only did hours exceed output, compensation rose at the same time, up 3.9 percent to lift unit labor costs by 4.5 percent.