Beating a dead horse

I know I won't shut up here about the lunacy of mass layoffs in a recession, but this morning's jobless claims report from the Department of Labor showed some interesting trends in productivity, as I've been predicting.

The productivity of U.S. workers fell more than previously estimated in the second quarter, pushing up labor costs and showing the slowdown in growth will limit profits. The measure of employee output per hour dropped at a 1.8 percent annual rate, twice the 0.9 percent decrease initially calculated and the biggest decline in almost four years...

Hours worked climbed at a 3.5 percent pace, the biggest gain in four years and evidence that employers were finding it difficult to meet demand with existing staff levels.

Hours worked climbed 3.5%, despite overall output only rising 1.6%. You can cut, cut, cut all you want, but eventually people get tired of being overworked and reach their limit. The optimist in me sees this as a positive sign for the employment picture as a whole, suggesting that continuing slides in productivity will force firms to start hiring again. Of course, the optimist in me's been getting beaten up a lot lately and might have a concussion. Time will tell...


[Bloomberg]