The drop in productivity helped push unit labor costs up 2.2 percent. That follows a 4.8 percent rise in labor costs in the first three months of this year, the biggest increase since the last three months of 2008. Rising labor costs reduce corporate profits. Labor represents the largest expense for most companies. When workers are less productive and cost more, companies are less likely to add jobs.
Productivity measures the amount of output per hour worked. Higher productivity is generally a good thing because it can raise standards of living by enabling companies to pay workers more without raising their prices and increasing inflation. Still, productivity gains can be painful in the short run if they are a result of job cuts.
That’s what happened in the recession, when productivity rose sharply as companies laid off millions of workers and figured out how to do more with less. Employees worked harder and companies invested in labor-saving technology and machinery. A slowdown in productivity growth is bad for the economy if it persists for a long period. It can be good in the short term when unemployment is high, if it means companies are reaching the limits on how much output they can get from workers.
If economic growth increases later this year, less productive companies may have to step up hiring. But the gains are unlikely to be large. Many economists forecast growth of roughly 2.5 percent in the final six months of the year. That’s barely enough to keep up with population growth.
Economists say a drop in productivity when economic growth has declined is a
troubling sign. That probably means companies hired too many workers earlier this year, 6 based on the assumption that growth was picking up. The result: weaker output from a larger workforce.
“If demand remains weak, there’s a danger that businesses may try to boost productivity by cutting jobs,’’ said Paul Dales, an economist at Capital Economics. The productivity trends are a sharp reversal from last year, when worker efficiency grew and labor costs fell. Productivity rose 4.1 percent in 2010. Labor costs, meanwhile, dropped 2 percent, the biggest decline on records dating back to 1948.
FBI wants businesses watching for customers paying with cash - Government calls buying 'night flashlights,' making 'extreme religious statements' indicators of terrorism - WorldNetDaily - Bob Unruh - August 12, 2011 - Just days after the White House announced a community-based approach to combating terrorism in the United States, the FBI and other agencies are asking managers of surplus stores to spy on their customers, watching whether they pay in cash, make "extreme" religious statements or purchase products such as waterproof matches... And the request from the government also is going to gun shops, fertilizer suppliers, motels and hotels, authorities say... The report warns that while the Constitution recognizes freedom of expression, "even for individuals who espouse unpopular or even hateful views," it also is the responsibility of government to deter "plots by neo-Nazis and other anti-Semitic hate groups, racial supremacists, and international and domestic terrorist groups." (The Hound - This is where the Domestic Security Grid continues to be unleashed on the American People. They tell you that it is for your own good, but where does it stop and who is keeping an eye on this Security apparatus and ensuring that they are accountable to the historical codes and laws of the People. Does any of this make you feel safer?)
What QE3 will look like - Activist Post - Robert Bonomo - August 12, 2011 - The recent financial fireworks in the US and in Europe have made it clear that QE3 is close at hand. The third installment described herein is much more than just another revving up of the printing presses, as it will involve a paradigm shift intent on restoring currencies and maintaining the current power structure... It's an all too common mistake to see the central bankers and their mainstream media propagandists derided as incompetent fools. These “fools”control the money and the message and it's their game to lose. Most pundits think the powers that be have lost control and can do little more than kick the can down the road. They are wrong. We are about to witness one of the greatest orchestrated events in human history; a monumental slight of hand that will restore economic prosperity, keep the masses happy and, most importantly, maintain the parasitic elites in power.
Analysis of Financial Terrorism in America - Over 1 Million Deaths Annually, 62 Million People With Zero Net Worth, As the Economic Elite Make Off With $46 Trillion - Global Research - David DeGraw - August 11, 2011 - Editor’s Note: The following report includes adapted excerpts from David DeGraw’s book, “The Road Through 2012: Revolution or World War III.” Release Date: 9.28.11
Analysis of Financial Terrorism in America
By David DeGraw, AmpedStatus Report
V :: How Much Wealth Do The Economic Elite Have?Part Three :: The Perfect Storm Overhead
VI :: Who Rules America? Revealing The Economic Top 0.1%
VII :: Tax Breaks For The Rich, Budget Cuts For The Rest Of Us
(Inequality = Debt = Austerity = Civil Unrest = Inflation + Deflation = Stagflation)
Dylan Ratigan telling it the way it is about how both Parties have sold us out. A bought and owned Congress and A bought and owned President.