Mar 07, 2012 at 9:43 pm
Lots of interest in this Friday’s jobs report. The consensus guesstimate is for about 200K on payrolls (220K private, implying continued job losses in the public sector) with unemployment holding at 8.3% (though my 12-yo kid says 8.4%; she makes this stuff up, but she has a weirdly good forecasting record). My own model says we do a bit better than that on jobs, but we’ll see.
One reason why we’re adding more employment can be gleaned from this AM’s productivity report. Note the line in the figure below, which plots year-over-year output-per-hour, or productivity growth (the bars are annualized quarterly growth rates, which are quite jumpy). The fact that it has slowed so much means that to produce a given level of output, employers need to hire more workers.
The 0.3% (last data point in the line) for 2011q4 over 2010q4 is well below trend and should not be taken as some major downshift in productivity growth. As you can see, a few quarters back that measure was trucking along at 3% and higher, so these numbers move around as employers adjust to current and expected conditions. But the very recent slowdown suggests that it’s harder to squeeze more output out of your current staff without adding new peeps.
Let’s see if Friday’s jobs report is consistent with that development.
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