{"id":413,"date":"2010-05-06T09:36:00","date_gmt":"2010-05-06T13:36:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=413"},"modified":"2018-08-19T10:12:52","modified_gmt":"2018-08-19T14:12:52","slug":"that-all-important-measure-productivity","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/05\/06\/that-all-important-measure-productivity\/","title":{"rendered":"That all important measure: productivity"},"content":{"rendered":"

U.S. productivity for the first quarter was up 3.6%.\u00a0 This compares to the previous quarter’s revised gain of 6.3%.<\/span><\/p>\n

Analysis:<\/strong> I have written at length on the blog about the difference between economic growth as measured by gross domestic product and what I refer to as real<\/em> economic growth.\u00a0 One of the measures of this latter kind of economic expansion is productivity so I prefer productivity to gross domestic product as a measure of how the economy is operating.\u00a0 That said, I have also written about the fact that the productivity numbers generated in the recession were unsustainable.\u00a0 This is because businesses across the country fired their workers en masse and asked their remaining employees to pick up any slack created by vacated co-workers.\u00a0 Long-term this results in an exhausted, over-worked and stressed work force that eventually leads to lower productivity unless businesses hire new employees.\u00a0 I would characterize the fourth quarter productivity gain of 6.3% – and all gains in 2009 – in this category.\u00a0 Which brings us to the first quarter gain of 3.6%.<\/span><\/p>\n

While the first quarter productivity number is down, it is a number more consistent with normal\u00a0economic growth.\u00a0 In other words, the decline is not something that I feel should create any stress in investors.\u00a0 Actually, I see it as a positive sign that the economy is becoming more regular and less volatile.<\/span><\/p>\n

Lastly, notice that the GDP tracks the magnitude of productivity, if not actually perfectly correlated.\u00a0 Fourth quarter GDP was up big, big, big and so was productivity.\u00a0 First quarter GDP was up more modestly and so was productivity.\u00a0 Tracking both of these figures gives you pretty good insight into the state of the economy.\u00a0 Right now, it is becoming more normal and that is a good thing.<\/span><\/p>\n

Importance grade: <\/strong>7; productivity is one of the most important measures of economic health.\u00a0 In my opinion it tracks well real<\/em> economic growth sans extraordinary circumstances.\u00a0 That the first quarter number is 3.6% makes me feel very comfortable.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

U.S. productivity for the first quarter was up 3.6%.\u00a0 This compares to the previous quarter’s revised gain of 6.3%. Analysis: I have written at length on the blog about the difference between economic growth as measured by gross domestic product and what I refer to as real economic growth.\u00a0 One of the measures of this […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-413","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=413"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/413\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}