Productivity Modest, Unemployment Drops But Job Market Outlook Weak

The U.S. Bureau of Labor Statistics (BLS) today (May 2, 2013) reported 0.7% annualized growth in labor productivity for the first quarter of

Jobs news could move the market.

2013.

Also today, the Department of Labor reported first-time claims for unemployment benefits fell the lowest level in five years last week, signaling fewer layoffs in the economy.

CNNMoney reports

About 324,000 people filed initial claims, the Labor Department said Thursday. The report was better than expected on all accounts. Economists were anticipating an increase in claims, but instead, the report showed claims had declined by 18,000 from the prior week, marking the lowest level since January 2008.

May 1 the BLS reported–

From June 2012 to September 2012 gross job gains from opening and expanding private sector establishments were 6.8 million, a decrease of 191,000 jobs from the previous quarter, the U.S. Bureau of Labor Statistics reported today.

During this period, gross job losses from closing and contracting private sector establishments were 6.6 million, an increase of 192,000 jobs from the previous quarter. The difference between the number of gross job gains and the number of gross job losses yielded a net employment gain of 199,000 jobs in the private sector during the third quarter of 2012.

 

The Conference Board released this analysis:

While the BLS report sounds like positive news , in reality both number point to a very weak outlook for the U.S. job market.

After a decline of 1.7% (annualized) in the fourth quarter of 2012, this modest rebound in labor productivity is still well below the longer term trend of 2-2.5%.

This small productivity dividend will do little to keep stock prices near their current highs or positively impact profit outlooks. It also does not provide much incentive to businesses and investors to green light some new investment projects.

Those are critical ingredients in sustaining output growth down the road.

The small improvement in productivity goes together with a moderate improvement in total hours worked, suggesting that productivity will not have a significant impact on the labor market any time soon.

Other recent economic news from the BLS

05/01/2013

March jobless rates down over the year in 306 of 372 metro areas; payroll jobs up in 287

04/30/2013

Compensation costs up 0.3% December 2012-March 2013, and 1.8% over the year ending March

04/26/2013

Percent of families with an unemployed person at 10.5% in 2012, down from 11.5% in 2011

04/24/2013

Persons with a disability: barriers to employment, types of assistance, and other issue

04/23/2013

In March, 1,337 mass layoff actions affected 127,939 workers

After a decline of 1.7% (annualized) in the fourth quarter of 2012, this modest rebound in labor productivity is still well below the longer term trend of 2-2.5%.

This small productivity dividend will do little to keep stock prices near their current highs or positively impact profit outlooks. It also does not provide much incentive to businesses and investors to green light some new investment projects.

Those are critical ingredients in sustaining output growth down the road.

The small improvement in productivity goes together with a moderate improvement in total hours worked, suggesting that productivity will not have a significant impact on the labor market any time soon.

Source: The Conference Board

Please subscribe to WWOw’s posts by email:[subscribe2]