The Productivity Flu
Although this week brought what looked like bad news on productivity, the underlying story was much milder than the initial diagnosis suggested .
The government said that nonfarm productivity, which measures hourly output of workers , increased at a 1.8 percent annual rate last quarter instead of the 2.8 percent pace initially estimated. That was slightly worse than the downgrade to two percent economists had forecast.
Unit labor costs —how much it costs employers to produce one unit of production—were revised up to 4.4 percent from 2.8 percent, causing some folks to worry that a wage-push inflation spiral might get started.
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