Drop In Productivity Paints 'Mixed Picture'

Jun 6, 2012

The Associated Press takes a traditional view of the news that American workers' productivity fell more than first thought in the first quarter.

The wire service says the report suggests "companies may need to hire more to keep pace with demand." So, the bad news that productivity was down at a 0.9 percent annual rate in the first quarter is potentially good news for those who are out of work.

Bloomberg News, though, says the report signals that "companies may pause before bringing on new employees." They'll push existing workers to produce more until they're convinced demand for goods and services is on the rise.

We'll leave it to MarketWatch.com to explain how to reconcile those views:

"The revised productivity numbers present a mixed picture. Falling productivity usually means companies have to hire more workers to increase output and keep unit-labor costs steady. Yet recent employment data suggest hiring has slowed dramatically after a late-winter burst of job creation."

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