Productivity and Labor Costs Both Headed the Wrong Way -- Very Much So

Economy

Published: May 7, 2014 9:05 am

Productivity and unit labor costs were very mixed in the first quarter of 2013. Much of this seems to be weather related, and the first reminder we would make is that this economic report covers the first quarter. That means that it should have limited market impact (if any), but it could be used as one of the readings that economists use to make revisions to that paltry 0.1% growth figure for gross domestic product that was recently reported.

Nonfarm productivity was put at -1.7%, worse than the Bloomberg consensus of -1.2% expected. The measurement for productivity is effectively the growth of labor efficiency in producing goods and services throughout the entire economy.

Unit labor costs were up 4.2%, much higher than the Bloomberg consensus estimate of 2.8%. It was only one-tenth of a percentage point behind the highest of all economist projections. Unit labor costs are effectively all the costs directly associated with producing the total output in the economy.

ALSO READ: Warren Buffett’s Top Nine Dividend Stocks

Again, this is a first-quarter report and is therefore unlikely to move the needle very much. Still, both barometers are used by traders and investors (and economists and businesses) as indicators of inflationary and output trends. That being said, Wednesday’s report was ugly — much higher costs tied to wages and employment for a much lower output.

Darn that stinking cold weather.

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.