CNBC reports that "worker productivity fell to start 2022 at its fastest pace in nearly 75 years while labor costs soared as the U.S. struggled with surging Covid cases, the Bureau of Labor Statistics reported Thursday.
"Nonfarm productivity, a measure of output against hours worked, declined 7.5% from January through March, the biggest fall since the third quarter of 1947. At the same time, unit labor costs soared 11.6%, bringing the increase over the past four quarters to 7.2%, the biggest gain since the third quarter of 1982. The metric calculates how much employers pay workers in salary and benefits per unit of output."
National Public Radio's Marketplace offers some analysis, establishing right up front that "it’s not because of Wordle."
According to Marketplace, "There are a few things that could explain the drop, experts told us. A lot of hiring, vacant positions and new workers who aren’t getting as much done … There’s also the supply chain mess. Inputs — parts, raw materials and so on — have been slow to arrive. Workers have been sitting around idle more of the time. And don’t forget about the omicron wave."
But there is some good news, Marketplace suggests: "Productivity data tends to be pretty volatile. So one bad quarter doesn’t make a long-term trend."
In other economic news, the Wall Street Journal writes that "new applications for unemployment benefits rose last week for the first time since early April amid other signs the U.S. labor market remains unusually tight. Initial jobless claims, a proxy for layoffs, increased by 19,000 to 200,000 last week from the previous week’s revised level of 181,000, the Labor Department said Thursday."
According to the story, "Filings for unemployment benefits have remained near historic lows since late 2021. The four-week average for claims, which smooths out volatility in the weekly figures, rose to 188,000 from the previous week’s revised 180,000. The four-week average reached 170,500 last month, its lowest point on records dating back to 1967."
And this morning, CNBC writes that "the U.S. economy added slightly more jobs than expected in April amid an increasingly tight labor market and despite surging inflation and fears of a growth slowdown, the Bureau of Labor Statistics reported … Nonfarm payrolls grew by 428,000 for the month, a bit above the Dow Jones estimate of 400,000. The unemployment rate was 3.6%, slightly higher than the estimate for 3.5%."
