Home Economy America’s productivity fell faster than any point since 1981

America’s productivity fell faster than any point since 1981

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That sounds terrible. But there are plenty of reasons it might not be a bad sign for the nation’s economic outlook.

To be sure, the recovery stumbled between July and September under the sudden threat of the Delta variant, which weighed down productivity. Worse, the supply chain chaos, which is yet to be resolved, held back production across various sectors.
Together, these factors help explain the steep drop in productivity, which decreased at a seasonally adjusted annual rate of 5% between July and September. That’s the sharpest decline since the second quarter of 1981, the Bureau of Labor Statistics said Thursday, when the United States was in the midst of a 16-month recession. In the third quarter of this year, output increased by 1.7%, while hours worked jumped by 7%.

But just looking at these bad numbers in a vacuum doesn’t tell us very much about the trend in the job market, said Wells Fargo Senior Economist Sarah House. A single data point –…

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