The US economy is experiencing growth, but this growth is not without its challenges. One of the key factors that are shaping this growth is productivity, according to Nick Bunker, economic research director for North America at the Indeed Hiring Lab. Bunker, along with other economists and Federal Reserve Jerome Powell, are still working to determine the level of productivity growth in the country.
Despite concerns about productivity growth, there have been some positive signs. According to data from the Bureau of Labor Statistics (BLS), nonfarm business sector labor productivity grew by 0.3% in the first quarter of 2021. While this was below expectations, it was still a positive sign given that it followed three consecutive quarterly gains of more than 3%, a rare feat that occurred during the pre-Covid decade.
However, there were also concerns about rising unit labor costs, which measure how much a business pays its workers to produce one unit of output. These costs increased by 4.7% quarterly, surpassing expectations. Despite this, productivity and unit labor costs both saw year-over-year increases of 2.9% and 1.8%, respectively.
Overall, while there are some positive signs when it comes to productivity growth in the US, there are still concerns about its implications for economic growth and inflation. As such, economists continue to closely monitor these indicators and their impact on the overall health of the economy.
