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Cooling Productivity Is the Heat Behind Jobs Figures

U.S. workers are getting less productive. Right now, that actually may be good news for the labor market.

Given that unemployment barely has budged this year, upping the pace of job creation is precisely what events this week were about.

the private sector is expected to add about 70,000 jobs, up from 64,000 in September. That, at least, is a step in the right direction.

The cooling rate of productivity growth.

Output per hour of work in the U.S. rose 2.5% in the third quarter from the same period last year, figures Thursday showed. That is a considerable drop from the first quarter's 6.3% growth rate, the strongest pace in almost five decades.

Hiring kicked in not when gross domestic product started to recover, as previously had been the case, but only once the bulk of productivity gains had been made. After the 2001 recession, it wasn't until productivity growth fell from a high of 6.1% to below 2% in 2003 that the U.S. started consistently adding jobs.

Meanwhile, the four-week average pace of new jobless claims is hovering near 2010 lows.

Friday's report may not be a highflier, but may be the start of better things to come. Read more at professional.wsj.com

 

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