Posted on 12/04/2009 8:53:37 AM PST by blam
Our Current Economic Illusions
Daryl Montgomery
December 04, 2009
When reading economic statistics, you should see if they are consistent (they rarely are) and make sense based on real world observations (lately they don't). On Thursday, December 3rd the U.S. productivity numbers were released, as were same store sales and weekly unemployment claims. The stories these three pieces of data are telling are quite different, which means at least one and possibly two of them are not correct.
Productivity in the U.S. is supposedly up astronomically. It rose by 8.1% last quarter and this is after being revised down from being up 9.5%! The recent downward revision of third quarter GDP from 3.5% to 2.8% meant the productivity numbers would be lower as well.
Productivity is essentially the amount of GDP produced per worker. Since employment is falling in the U.S. and GDP is supposedly rising (the two moving in opposite directions is illogical) productivity has to go up. According to the government, it is going up a huge amount. Is there any major new technological advance or innovation accounting for this? None, that anyone knows about.
Economists claim that productivity has gotten better because the least productive workers have been fired. While this might give the numbers a percentage or so boost, it wouldn't give them an 8% boost. The alternative explanation is that GDP is being grossly overstated by the U.S. government. There is substantial documentation that this has indeed been the case for the last three decades.
[snip]
Carefully avoiding mention of the typical spike in temporary holiday hiring, of course.
Yep.
Remaining to be ‘splained are these facts:
Average work week is 33 hours at last count.
Unemployment (U3?) is 10%.
Underemployment + unemployment (U16) is 17.5%
Same store sales are up 1/2 of one percent?
Please... I await enlightenment....
Or maybe we decided to “Gorify” the numbers...if you get my drift..
LOL, the less hours worked the higher the productivity number, it is a bogus bean counter number. The less workers the higher the number, if you had full employment and a growing productivity number it might have a meaning.
[snip]
"What happens between here and there? While in our view, our forecast episodic adventure takes at least 2-3 years but, no one knows for certain. We forecast 2010 to be one of the very worst years of Greater Depression II; the year 2010 being the second cycle of several depressionary phases. The fall of Lehman and a surrounding crash was only Phase One. Before Phase Two terrorizes global markets, we suggest a short recovery arrives first."
The problem with these three measures is that two of the three are measured in DOLLARS, which no longer represent a fixed measure of value because the FED is cranking out paper dollars at a rate never seen before in history.
The employment and unemployment rates are supposed to be measured in bodies, but they have been trying to convert that measurement into dollars as well.
The writer is on to something. An 8% increase in productivity is inconsistent with what is happening in the real world.
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