Worker productivity surged at the fastest pace in six years, labor costs fell and unemployment claims were lower than forecast, signaling companies may be preparing to start hiring again after cutting costs to the bone.


U.S. Economy: Worker Productivity Surges, Costs Drop (Update1) - Bloomberg.com

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WOW...

That's a headline right out of a communist paper.

Didn't they repeat that over and over again in Orwell's 1984?

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Well considering pay dropped considerably I can see this.

Companies that payed 10 bucks an hour are now paying 8.

Its basic supply and demand.

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This always happens when times get lean. And I don't agree with the writer's opinion that "companies may be preparing to start hiring again." This happened when the tech bubble burst, it's bad for workers, and good for businesses.

What tends to happen is companies cut their workers down to the most capable, and adaptable, start giving them multiple jobs, and maybe even cut their wages. Productivity goes up, costs go down, along with wages. And the rude awakening for unemployed workers seeking work when hiring goes up, is that they are now expected to do more for less pay, than they did before they lost their job.

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-Thomas Jefferson

The ministry of truth can do better.

Productivity always increases this time of year.
Cost are down to production because companies have:
1) Cut wages
2) Cut hours
3) Cut # of employees
4) Removed most or all non essential employees
5) Etc.

All of these things will boost productivity per employee....duh.

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The government cannot give without first taking.

Nonetheless, it's good to see Americans increasing their production. It's a good sign that the good old work ethic ain't dead.

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One way of looking at it...another way is those who still have a job are working hard because they have to.
I can tell you with absolute certainty - many, many people are giving up their vacation time for fear of losing their jobs while gone...now that will also provide a significant boost to productivity.
There are too many things in play to make this data meaningful IMHO.

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The government cannot give without first taking.

This is the second consecutive quarter of very high productivity.

Actually, these numbers are impressive and even extraordinary: the best back-to-back quarters since 1961.

So it really is true that employment will have to pick up for growth to continue.

But of course, it may not and we may just go back into recession.

well productivity may be high but thats not an indicator that we are ready to take off, it means they have re adjusted their bottom lines and now as Angry American said have entrenched workers on the "be glad you have a job" mindset, and will ride that for a while. We are maxxed out, credit etc. for folks to push co's to go beyond their current productivity as in adding employees expanding manufacturing they just got done cutting, they need a sign and its not out there.

Remember that unlike 20 years ago, EVERY quarter is a quarter if expected growth, q1 is always forgiven but there after, wall st punishes them if they don’t, but the malaise is coming, these last 2 quarters were the by product of cash for clunkers, cutting workers and shutting down superfluous production, if consumer purchase don't drive constant inventory depletion they won’t expand. The malaise is coming where in they have cut as much as possible, and without vibrant orders to keep the lines running at capacity and then some, well, there it is.

Obama has sent them the opposite signal, they are not going to expand on blind faith, they know we are getting ready to get taxed at every income level with the Bush cuts expiring too.

As I said in another thread Pelosis bill whacks dividends and capital gains, that will force some folks if it passes to cash in now before it takes effect, spurring some activity, then sink as those gains have been taken and the rest of the the folks have restructured their portfolios and that potential investment or consumer money, flee's for safer tax venues or mechanisms.

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The unemployment rate is now 10.2%. Obama told us if we passed the stimulus bill that it would go no higher than 8%. He also told us that if we did nothing it would max at 9.1%.

Fantastic responses.

Thanks all.


Obama: Economy "Sobering," but Turning Around

Even at 10.2 percent, the worst in more than a quarter century, the nation's unemployment rate has not topped out.

"More likely than not, it will get a little worse before it gets better," said White House spokesman Robert Gibbs at his midday briefing today.

For months, the White House had been warning us to brace for a double-digit unemployment rate. It arrived this morning with a thud – like an anvil dropped from a 10.2-story building.


Obama: Economy "Sobering," but Turning Around - Political Hotsheet - CBS News


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But will unemployment catapult the ultra-conservative GOP?

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