Seems this has to come from ‘overhiring’ or very odd seasonal adjustments?
And many of the 1.2 million people who lost benefits Jan 14 and took menial jobs that didn’t add to output? Same happening as benefits expire? Should normalize through either more output or fewer jobs?
Productivity and Costs
The grinding halt that the economy came to the first quarter pulled nonfarm productivity down by 3.1 percent and inflated unit labor costs by 6.7 percent. These are more severe than the initial data released a month ago where productivity was pegged at minus 1.9 percent and unit labor costs at plus 5.0 percent. Output as measured in this report fell 1.6 percent in the quarter at the same time that hours worked rose 1.6 percent. Adding to labor costs was a sharp 3.3 percent rise in compensation.
Looking year-on-year, productivity is on the plus side, though just barely, at 0.3 percent with labor costs more tame, at plus 1.8 percent. Should the second-quarter see the bounce as many suspect, productivity, compared to the first quarter, should improve and labor costs cool.