I don't believe the productivity numbers

Posted by: Michael Mandel on February 06

This morning’s release from the BLS says that nonfarm productivity grew at a 1.8% rate in fourth quarter. Quite bluntly, I’m suspicious of the number. Neither companies or consumers are behaving as if productivity is rising.

If there’s one thing that we learned from the 1990s, it’s that productivity stats are subject to big revisions. You can’t even be sure the sign is right.

I’m also sure that we’re not accounting for imports correctly (as per my offshoring cover from last year).

More to come a bit later.

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Reader Comments

spencer

February 6, 2008 02:57 PM

Look into my comment of a few days ago of why hours worked in the productivity data have been so much weaker than the hours worked in the employment data.

The employment data is for production workers while the productivity data adjust this data to estimate management and other non-production workers. The adjustment is based on the data collected at the last census. But because the census data was collected in 2000 right at the cyclical economic peak
I suspect it may be creating a large bias in the estimate of supervisory vs production workers.

There are other issues that involve exactly what is a production worker in the modern non-manufacturing economy.
For example, is a programmer a production or professional worker?.

Brandon W

February 6, 2008 08:51 PM

It's an election year. Bad economic news is bad for incumbent parties. Someone over at the BLS is getting their nose tweaked.

citracyde

February 7, 2008 04:19 PM

I'm equally suspicious.

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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