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    US productivity falls in spring, labor costs rise

    WASHINGTON (AP) — 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.

    Economists are forecasting that productivity will slow over the next couple of years while labor costs will increase. However, they don't see these developments as worrisome during the current period of high unemployment and weak income growth.

    They argue that the economy can tolerate a brief period of weaker productivity growth if it means that companies have reached the limit on the amount of work they can squeeze out of the existing work force and begin hiring back the millions of workers laid off during the recession. That would boost income growth and result in stronger consumer demand which they hope will drive the economy to a faster expansion.

    During the recession and immediately afterward, productivity soared with worker efficiency rising at an annual rate of 4.1 percent last year, the strongest performance in eight years. Economists at JPMorgan Chase are forecasting that productivity this year will grow by just 0.7 percent.

    Analysts also expect labor costs to rise at a faster clip this year but that will come after a 2 percent decline in labor costs in 2010 which was the largest drop on records that go back six decades. With the economy growing at such a weak pace and unemployment remaining high, workers have little bargaining power to push for wage increases.

    The 0.7 percent drop in productivity in the April-June quarter followed a 0.6 percent productivity decline in the first quarter. The 3.3 percent rise in unit labor costs in the second quarter followed a 6.2 percent increase in the January-March period.

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    88 comments

    • JasonP  •  8 months ago
      Hooray! What a wonderful choice in presidents America, YES WE CAN! CHNAGE WE CAN BELIEVE IN! BLAME BUSH MAYBE SOMEONES LEFT THAT'S STUPID ENOUGH TO BELIEVE IT!
    • Sam Moore  •  8 months ago
      The only question left is can America ''Survive "16 more Months of Obama radical Socialist economic killing Business rules regulations and EPA B/S ?
      200,000 could be back at work next month if Obama took his EPA Foot of of Energy being made in America .
      This now makes all 12 official Economic Indicators look worse than terrible for the coming next 2 years .Not to mention Home prices have dropped another 7-10 % since last Spring .
      Retirement Funds ... 23-27 %have fallen the last 8 months alone .
      The Official count of Obama new rules and Regulations o Business is 4,200 .
      741 EPA, DOD and CEDA Rules
      Far more than all the Presidents since FDR put together .
    • Pietro  •  8 months ago
      If it looks like a duck and walks like a duck, its a duck. Even us stupid hicks get it.We did try something different, electing a duck and look what it got us. Now, in Obamaland , you may say I am crazy if I see ducks, but if I say I do, its true. The CBC sez' we are all duckhunters. Damn, brother can't get a break. I am tired ya'll.
    • L  •  8 months ago
      The U.S. economy is like a extremely large wheel that needs to change direction and can not possible do that without stopping first. The amount of government is directly related to how far down the economy has gone and recovering to its once vibrant state has all but disappeared. If and thats a big if things would change. There is little use going there. Its like opening a down pillow in a wind storm and then trying to recover all the feathers to put back into the pillow. It can be done however not without a lot of effort. Without the political will to recover all the feathers we are all domed.
    • A Yahoo! User  •  8 months ago
      One would have to be blind and deluded not to realize that the destruction of our economy and country by Obama is intentional. It is Communist Obama's agenda to destroy this country. One has to destroy what exists before they can build on their "new foundation".
      • Rob 8 months ago
        Hoo boy! Who's blind and deluded here?
      • Liberal Proud 8 months ago
        So what's the problem. The US sucks, so we need to destroy it, and then we'll build a better place for our children.

        You guys only care that Obama fails. You guys are racists.
      • Michael 8 months ago
        And there is the racist comment. It would be strange a liberal left that little gem in their arsenal.
    • Harry Kneecaps  •  8 months ago
      "rising labor costs would cut into corporate profits"

      We cant let that happen. Corporate profits are far more important than your ability to survive. Write your congressmen and demand a repeal of minimum wage so employers can cut your wages further to keep profits high.
    • artemis133  •  8 months ago
      People are TIRED!
    • Jerry  •  8 months ago
      too many people farting around on their cell phones
    • Rocco Tool  •  8 months ago
      "Fragile economic recovery"

      That's like Jeff Gordon's in last place in a NASCAR race, and the announcer says, "Gordon is struggling for the lead..."

      Productivity is down, labor costs are up, unemployment is sky-high, food costs keep going up, gasoline prices rise because this Regime refuses to drill, inflation is going up, Socialized medicine is a threat to everyone, Porkulus bills in the trillions don't do anything, foreign relations are a joke now....

      Do you get the picture?

      How about we go back to much better times and smaller government?

      Join our national consciousness, the Tea Party, because we certainly can't afford any more of this nonsense.
    • Maryellen  •  8 months ago
      "When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation." -- Adrian Rogers
    • Maryellen  •  8 months ago
      Why work when you can get it for free?
    • Bobbala  •  8 months ago
      ... the next step is to confiscate the white farmer's land and turn it over to the oppressed minorities ... meaning Obama's supporters ...
      • Maryellen 8 months ago
        Then we really will starve.
    • JohnM  •  8 months ago
      This is what happens when companies downsize their workforce to save a buck. With less workers on the payroll, the ones left have to pick up the pace. The problem is that many times the ones left on payroll are overworked and finally get tired of doing the extra work. There is a breaking point between workers and productivity and I think the companies have over extended their employees that are left.
    • A  •  8 months ago
      Heres the Big Lie again, that there is some recovery. Odd that the same old story gets played over and over again -"Gee we didnt expect how bad things are..."

      If there WAS "recovery" then they wouldnt be bad, would they? So THERE IS NO RECOVERY. "Recovery" means "going back to the previous state" which is NOT happening, its does NOT mean "a small imoprovement"

      "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."
    • michael  •  8 months ago
      I remember an old West Virginia Hillbilly saying: You cannot get the water to clear up until you get the pigs out of the creek.

      *If any other of our presidents had doubled the national debt, which had taken more than two centuries to accumulate, in one year, would you have approved?*

      *If any other of our presidents had then proposed to double the debt again within 10 years, would you have approved?*

      *If any other of our presidents had criticized a state law that he admitted he never even read, would you think that he is just an ignorant hot head?*

      *If any other of our presidents joined the country of Mexico and sued a state in the United States to force that state to continue to allow illegal immigration, would you question his patriotism and wonder who's side he was on?*

      *If any other of our presidents had pronounced the Marine Corps like Marine Corpse, would you think him an idiot?*

      *If any other of our presidents had put 87,000 workers out of work by arbitrarily placing a moratorium on offshore oil drilling on companies that have one of the best safety records of any industry because one foreign company had an accident, would you have agreed?*

      *If any other of our presidents had used a forged document as the basis of the moratorium that would render 87000 American workers unemployed would you support him?*

      *If any other of our presidents had been the first President to need a Teleprompter installed to be able to get through a press conference, would you have laughed and said this is more proof of how inept he is on his own and is really controlled by smarter men behind the scenes?*

      *If any other of our presidents had spent hundreds of thousands of dollars to take his First Lady to a play in NYC, would you have approved?*

      *If any other of our presidents had reduced your retirement plan holdings of GM stock by 90% and given the unions a majority stake in GM, would you have approved?*

      *If any other of our presidents had made a joke at the expense of the Special Olympics, would you have approved?*

      *If any other of our presidents had given Gordon Brown a set of inexpensive and incorrectly formatted DVDs, when Gordon Brown had given him a thoughtful and historically significant gift, would you have approved?*

      *If any other of our presidents had given the Queen of England an iPod containing videos of his speeches, would you have thought it a proud moment for America?*

      *If any other of our presidents had bowed to the King of Saudi Arabia would you have approved? *

      *If any other of our presidents had visited Austria and made reference to the nonexistent "Austrian language," would you have brushed it off as a minor slip?*

      *If any other of our presidents had filled his cabinet and circle of advisers with people who cannot seem to keep current in their income taxes, would you have approved?*

      *If any other of our presidents had stated that there were 57 states in the United States , wouldn't you have had second thoughts about his capabilities?*

      *If any other of our presidents would have flown all the way to Denmark to make a five minute speech about how the Olympics would benefit him walking out his front door in his home town, would you not have thought he was a self-important, conceited, egotistical jerk.*

      *If any other of our presidents had been so Spanish illiterate as to refer to "Cinco de Cuatro" in front of the Mexican ambassador when it was the 5th of May (Cinco de Mayo), and continued to flub it when he tried again, wouldn't you have winced in embarrassment?*

      *If any other of our presidents had burned 9,000 gallons of jet fuel to go plant a single tree on Earth Day, would you have concluded he's a hypocrite?*

      *If any other of our presidents' administrations had okayed Air Force One flying low over millions of people followed by a jet fighter in downtown Manhattan causing widespread panic, would you have wondered whether th
    • michael  •  8 months ago
      “If the US government was a family, they would be making $58,000 a year, spending $75,000 a year, and have $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget and debt, reduced to a level that we can understand.
    • Doc Holiday  •  8 months ago
      A recession is when your neighbor loses his job
      A depression is when YOU lose your job
      A recovery is when OBUMMER LOSES HIS JOB !!!!! 2012--2012--2012!!!
    • J  •  8 months ago
      Why is it that every single time they revise previous period figures, it is always worse than reported? it is never better. Sounds like the government games the system to try to get better press out of it. OUr government is full of crooked people.
      • Rocco Tool 8 months ago
        Remember when Bush was president and unemployment was only 4.6%?

        The media was aghast. Dems called it "intolerable!" "Awful economy!"
    • AtlasObjectivist  •  8 months ago
      Everything tumbles when the Obma administration is in control.
    • Collardgreens1  •  8 months ago
      Of course. The Obama administration is focused upon advancing the interests of the labor unions, while building a wall of regulatory roadblocks to impede business. What other outcome could possibly result from that policy?

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