Worker Productivity Plummets in the Second Quarter

It is worrisome that worker productivity is falling more than hours worked is increasing. It means that total amount produced per worker is falling and that eventually means lower wages.

Worker productivity in the United States fell this spring more quickly than previously estimated while labor costs were rising at a faster clip. Both developments could pose threats to a fragile economic recovery. The U.S. Labor Department reported Thursday that productivity declined at an annual rate of 0.7 percent in the April-June period, a bigger drop than the 0.3 percent decline reported a month ago. Labor costs rose at an annual rate of 3.3 percent, faster than the 2.4 percent increase originally reported. The changes reflected downward revisions made last week to overall economic growth which showed the economy's output barely growing in the spring. Declining productivity, if it persists for a prolonged period, would represent a serious economic threat while rising labor costs would cut into corporate profits. . . .

Meanwhile it isn't too surprising that more Americans are blaming Obama for the current economic problems. This new poll from CNN is available here.

Only a third of all Americans approve of how President Barack Obama is handling the economy, according to a new national survey. And with a CNN/ORC International Poll also indicating that more than three-quarters of the public say the country is in bad shape right now, there's little wonder why the president is getting such low marks. According to the poll, released Wednesday morning, 28% of people questioned say things are going well in the country today. "That may be a slight uptick from early August but it still represents a double-digit drop from earlier this year," said CNN Polling Director Keating Holland. "And it's clear that economic jitters are a drag on President Obama's standing with the voting public." . . .