Productivity and Job Numbers
"Up 4.3% eh?
I don't believe it.
I've tried to get productivity increases out of moribund environments before, both in other people's employ and as a CEO.
It ain't happening without major technology changes (e.g. firing 20% of your workforce and replacing them with a computer), and that's not something that does anything good in the jobs - and economic - picture at a macro level.
But when things start to get tight, there's not much that a business owner can do other than tighten that belt in such a fashion. How do you generate productivity? You fire people and demand that who's left does more, or they join those walking the unemployment line. This does tremendous things for employee morale, among other "minor" problems.
The global economy, particularly in Europe, is slowing rapidly. Both the BOE and ECB held rates steady, which was expected by everyone and didn't move much of anything.
So now we've got two separate reports - GDP and productivity - that simply don't make sense, and if the productivity number is accurate, it portends massive layoffs and ugly employment statistics to come.
Frankly, I don't believe any of it at this point, and will instead wait for quarterly reports, which will start in another month or so, to tell me more about the true state of American business.
My expectations are for some real nasty numbers, especially among exporters. Those who have been getting a lot of export-related "boost" from currency slides are now getting relentlessly bent over the table, with the Pound losing about 12% .vs. the dollar in the last couple of months, and the Euro about 10%. Both of these are tremendously ugly if you're exporting, as just like you "did great" as the dollar tanked, now that its strengthening the exact opposite is happening to your profit margins, as the sale price of your products in constant dollars is falling like a piano out the window."
