CTH puts released economic data into ‘what does it mean‘ terms as a conversational priority. The Bureau of Labor and Statistics (BLS) releases the first quarter productivity and costs report today [BLS Data Here].
Outputs, what was created, dropped 2.4 percent, yet labor hours used to create those outputs increased 5.5 percent. This creates a productivity drop of 7.5% for the overall business. The largest quarterly drop in productivity since 1947.
This is a warning indicator inside the economy to employees of large organizations. CTH has been tracking productivity for quite a while, and the signs have all looked foreboding. {Go Deep} Businesses cannot afford to keep employees on payroll if customer demand drops.
The per unit labor cost to make the products has increased 11.6%. Wages have gone up 3.2% (pay increases) and productivity has dropped 7.5%, combined that creates the 11.6% increase in per unit cost to producers.
I have often used the example of making bread {Go Deep}. If you are making 10 loaves of bread, there is a set amount of cost associated with each loaf created. The total cost of each loaf is the total cost to produce the entire batch divided by ten.
If you have customers demanding 15 loaves of bread, you make more profit on the last five loaves because it doesn’t cost 50% more in material or labor to make 50% more loaves. Your productivity in the last five loaves is higher because the fixed costs of production (raw materials, energy) barely change, and the labor is only slightly higher. However, the opposite is also true.
It costs more per loaf if you make fewer than ten loaves, because the fixed costs and labor are pretty consistent, yet the finished value of 7 loaves is less than the finished value of ten. Your bread selling business is now making less money.
In the first quarter of 2022 (Jan-March) the cost of materials has skyrocketed. The bakers have received 3.2% pay increases, they are working 5.5% longer hours, yet the amount of bread produced has dropped by 2.4 percent because consumer demand is shrinking. Each loaf of bread now costs more to produce, production productivity has dropped and you are selling less. What comes next? Some of the bakers are going to lose their jobs.
“Nonfarm business sector labor productivity decreased 7.5 percent in the first quarter of 2022, the U.S. Bureau of Labor Statistics reported today, as output decreased 2.4 percent and hours worked increased 5.5 percent. This is the largest decline in quarterly productivity since the third quarter of 1947.”
[…] “Unit labor costs in the nonfarm business sector increased 11.6 percent in the first quarter of 2022, reflecting a 3.2-percent increase in hourly compensation and a 7.5-percent decrease in productivity.” (BLS REPORT)
The root cause of such a massive decline in productivity is a genuine decline in demand.
In the aggregate, consumers needed less goods and services. This aligns with the diminished and lower retail unit sales [note: dollar-valued sales are skewed by higher prices]. It is a simple cause and effect. When gasoline, energy, and essential products like food cost more, consumers have less money for other stuff. Demand for the non-essential products drop.
As the demand drops, the productivity of the economic activity to generate those goods and services also drops. However, the scale of the decline is the part to pay attention to. We have been watching this continued drop in productivity for a year. Another 7.5 percent drop in productivity (Q1) is huge for a single quarter. Under normal circumstances this means more slack in the labor market, and that is what we should eventually see surface in lower employment.
Consistent productivity declines, as a result of lower consumer demand, lead to increased unemployment.
Layoffs begin. Sad.
Old Joe has a plan to make it all better with hordes of cheap illegal labor, he wants them all to have green cards. They claim cheap labor will lower inflation.
For everyone thinking if we can hang on until 2024, Trump will fix it all, forget it. Whether the country can survive until this fall’s midterms is the operative question.
High polarization + recession/depression = Conflict and revolution
Sad!
How long after, until those with less, come to the next neighborhood to force you to give up your food, car,clothing, etc?
Moving far enough out is not an option for many.
Any other answers?
Keep praying!
Who they gonna lay off? The actual workers have NO redundancy whatsoever.
Perhaps they can finally thin the HR dept, Diversity department of Diversity, and useless suit-wearing pinheads.
Other than that, the doors are gonna close.
That’s definitely true in Health Care. Thanks to the Biden vaccine mandates we are already at crisis level staffing. No one wants to work in health care anymore & be forced to keep injecting life threatening drugs into their bodies for the privilege of being allowed to work, plus wear a filthy mask all day. It’s very difficult to recruit people. Yet you can bet there will still be lay-offs. Stay healthy, because sabotaging the health care industry is a part of the OBiden/NWO plan. This will pave the way for the federal government to take control of healthcare & then they will get to decide who is allowed to have the treatment rations. Political undesirables need not apply.
But “Brandon” told me this is the best economy ever, and the Republicans aren’t refuting his position.
Republicans are worse than useless. They’re taking up space that could be occupied by a real opposition party.
kind of like why professional wrestling isn’t really wrestling.
At least its entertaining with the wrestlers!
and they have a skillset
Even the pulled punches and slams are real.
This crowd is three levels below Ru Paul gettin’ pissy.
Their biggest crime: bad hair and bad clothes thinking they’re glorious.
The bad ones are Provincials. They worry of their province and their pose.
What else are imposters and poseurs supposed to do?
They have nothing else to sell if they can’t harvest it from you.
Republicans can no longer hide; they are being exposed so clearly, that the dumbest, least informed Republican voter has to realise the truth that voting for a Rino, “because the Dem is worse” isa losing strategy for the voter and our country.
Just not true.
It’s true of Provincials. That’s where the RINOs come from. That’s the establishment ilk that populates the mausoleum some call Congress.
There are truly great Republicans. Sad there are not more of them in the Republican Party and in elective office.
Yeah, and I can count ’em with my shoes on.
Hopefully what they realize is that they need to get active in the primaries so RINOs can’t get through.
The Republicans will not allow any non-rinos to run. They own and control their “party.” You only run as an R if the party allows you to run on their ticket. They are private organizations. If they choose to allow non-rinos to run it’s usually because they will use the non-rinos as a splitter strategy to cull out everyone so the “chosen rino” wins.
Truth
Precinct captains stop that. There about 200+ openings.
Yes. Here in Ohio we will have our rino Governor against our will.
For proof of the truth of that, look at our open primary here in Georgia.
With President Trump’s first impeachment, EVERY Democrat voted GUILTY! On the 1st article of impeachment, the only RINO that voted guilty was Romney. On the 2nd article of impeachment, not a single RINO voted guilty.
But somehow … you are pushing your total BS narrative that RINOs are worse than Democrats!
Not all non MAGA politicians are the same. Just compare the scumbag Romney’s voting record to the voting record of the typical Democrat. Democrats make Romney look like a saint.
That you would even push your hideously evil narrative that RINOs are as bad as, or worse than Democrats, shows that you want Democrats to win. You are here to tell us to “throw the baby out with the bathwater”.
Don’t even start with “Hanburn’s” argument that I must be a RINO.
You can count maybe 4-5 senators or reps to do the right thing. The rest, d+r must go. 99%
I usually vote in the democrat primaries to help mess them up (Rush’s Operation Chaos). I was doing it before Rush suggested it. But not this time around. I will be voting against all incumbent republicans. FJB
And don’t forget the CNBC idiot, Jim Cramer. Best ever in his lifetime.
Well, shoots my lay off based hypothesis right out the window, I think. But first is the low ‘output’ you speak of…we must be there? I am wondering what the real numbers are for actual demand…
https://www.bea.gov/news/blog/2022-04-28/gross-domestic-product-first-quarter-2022
The dirty munchkin is in the measurements. Dumping employees funds a harvesting of assets without the commiserate liabilities that will start falling like an angry spring rain when the storms come, as they must and do.
The human employee is the ultimate asset, The human individual as customer and employee is the heart, soul and success of human economy.
Tricks and prevarications will work for a while. A while. In a while the reckoning always comes.
These fundamentals never change.
Short term gains win promotions for some at the cost of others. The pendulum builds up stored inertia until it breaks loose and swings back their face.
The art of the game is making sure somebody else always pays for it.
Nobody saw the mass retirement of baby boomers coming
Smdh
They’re actually not retiring and that’s keeping the younger, cheaper labor force from coming in as replacements.
True for some, yes. In the few instances where I am personally aware of that happening, it is almost entirely due to the economy making it nearly impossible for the retirement-age people to be able to maintain a std. of living from their savings and SSA that is anywhere close to their std. of living while employed with healthcare benefits. Not everyone planned well or saved enough or had great pension/benefit plans for retirement… due to a variety of circumstances.
What choice do we geezers have, with SSA and pension payments losing purchasing power as fast as I can type this?
like no one saw the planes into buildings scenario. except apparently mossad general and premier hollywood producer arnon milchan, who stole the u.s. nuclear triggers for israel’s first hydrogen bombs.
https://search.yahoo.com/search?ei=utf-8&fr=aaplw&p=the+medusa+touch+plane+into+building
Actually there were a few that saw the “planes into the buildings” risk before 9/11 and tried to stop it but were drowned out by DC politics. Personally heard a high ranking FBI official warn of the exact risk & plan fully 18 months before it actually happened. Not unlike what is happening right now with the US economy, only this coming US economic crash will be worse than 9/11. Watch PBS ” The Man Who Knew” .
Yeah. I was totally surprised myself. I never did get to see Jimi Hendrix or Shania Twain. Where did the time go?
Markets in whiplash , up yesterday , down today. Buy the dip , or sell in May & go away ?
the latter. add silver miners.
The market had a two-day bear rally to resistant level 34,000. then sold heavily to below 33,000. 32,500 is a huge old support area. A close below the all-important 32,500 would be ominous. The next major support is not until 28,500. Market trade below 30,000 would even get the wealthier Libtards attention.
Hard to imagine other than insanity what would keep affluent Libtards from getting concerned?
Frugality, growing your own food, and making more homemade food items instead of buying them (like bread) is a good thing.
True, have been baking bread for about a month again and have gained 5 lbs, darn bread is awesome right out of the oven slathered with butter!
Blend about 1/3 whole wheat flour in with your white flour, then bake…… You’ll gain 10 more !
The so-termed; “economic advisers” to the regime knew, and foresaw, that this was the intended outcome.
That’s why you’ll never see their faces.
This is just beginning, it’s going to be real and ugly before summer.
It’s going to get uglier when the winter harvest starts due to the planting season interruptions and added costs. As the Goya CEO said “…the US won’t have foot shortages, it will have food affordability problems…”
I did this.
Sincerely,
Joe Biden
SD again telling it straight. The business MSM knows this but spins for the regime.
This decline in demand is in spite of a small percentage of the population INCREASING their demand; those who can see the writing on the wall, and have been “stockpiling” either because of impending shortages, or the reality that “its only going to INCREASE in price, so I might as well buy it now”; both of which are occuring.
And, such thinking is NOT confined to Treepers, or even Conservatives.
My sister is a liberal/leftists, and yet she has been stickpiling for months.
And, then presumably there are those who are unaffected by price increases, the people who “have someone” to do their grocery shopping and gas up their cars. THEY (presumably) aren’t ‘cutting back’ or doing without.
Point is, even these #’s are suspect, and probably aren’t accurately showing just how “bad” it is.
And then, there is the mass psychology aspect, which you can’t reduce to #’s.
RINOS, despite their efforts gaining majorities in Congress, and then not addressing the horrible coarse Brandon has us on, will be their undoing.
The nRNA vaccinations and the grotesque maladministration of the overall COVID response seem to have increased and accelerated premature death with an overall increase in years of life lost across the general population. This heinous cull is tragically very real and will and must have profound impacts across a broad spectrum in business and industry where talent and experience are an essential asset in the economic business model.
There is the wave, and then there are the forcings within the wave.
This one seems to be different.
I could never understand why big labor always supported the Democrats that caused the recessions with their policies. Big labor suffers the most during times of recession. It’s like shooting yourself in the foot and then complaining about the horrible foot pain.
Watch 1954’s “On The Waterfront” movie for some insight. Great movie.
It’s because big labor isn’t about improving conditions for lowly union members. It’s about lining the pockets of the union leaders.
If only Putin would stop hindering our economy.
someone should make a list of all the foreign assets being abandoned in russia for nothing or a pittance to “punish russia.” oil refineries, bottling plants, fast food restaurant chains, retail outlets and inventory, automobile factories and inventory, the list would be quite impressive.
china is chartreuse with envy.
Losing McDonald’s is not such a bad thing…
Tell that to the entrepreneur that loses his life savings when it is closed.
And add the cost of increased theft.
Remember this is a feature not a flaw. When they pumped the economy with trillions in lower value “stimulus” dollars and shut down the economy they created a beast we hadn’t seen before. One of their tricks to stall rising inflation is to intentionally cool consumer activity. With smaller activity come inevitable closures and lay offs. DC lives on your tax dollars and we’ll padded bank accounts so they’re prepared to ride it out. FJB will want to hand out more trillions while blaming “evil” corporations. The woke corporations will throw some shiny bandaid at it while none of them have any intention of fixing this. We needed an exit plan and economic minds that thought on their feet and could adapt. Trump and his team I recall were working on that but….covid and mean tweets and no warm and fuzzy. Now here we are.
Trump, unfortunately, started this: lockdowns, freezing student loans, payments to everyone, etc. He listened to Fauci instead of people like Scott Atlas. Too bad. He was great for 3 years.
Yup, All Trumps fault…. Concern Trolls are concerned.
Too bad you are so ill informed.
Trump got bad advice from Fauci and Birx and assumed the lockdown would be two weeks as they advised. He tried to reverse course, but was subverted by Fauci and the leftist media. Even DeSantis locked down Florida for a short time, closing all major highways into the state. Fortunately, he realized the mistake quickly. The difference between conservative leaders and leftist leaders is that conservatives admit mistakes and correct them. Leftists keep marching over the cliff.
Not a popular comment here, but it is the simple truth. He shut the country down, completely. Unprecedented violation of our Constitutional rights. We have not recovered and doubt we will.
It was an ask not an order. ORDERS came from the states
He shut it down.
He shut nothing down
The commie governors did
He was stabbed 1000 time over and he is stronger today
The facade of the globalist elitist evil is off
The worlds people see it and know it
Factually incorrect. It was PDJT, from the Whitehouse press room, March 20(?), 2020. He also said we would be back in churches by Easter. Foolish move which then opened the door for the governors to keep it shut.
There is video tape of the press conference, complete with the banners “15 days to slow the spread”. All started with the POTUS.
Encourage you to check it out.
So much avoidable suffering is here and much more on the way.
Unfortunately 1/2 the country needs a swift, painful kick to the groin. Only through the suffering purchased with their commie ideas will there be any chance to break the lefty trance. Hard to be pissed about anti-groomer laws when little johnny’s [sorry, is it jo-hanna this week?] stomach is grumbling.
Too bad the rest of us have to suffer along with them.
The Fed’s “Full Employment” smokescreen begins to be blown away.
This will soon become a thunderstorm.
NATO’s proxy war against Russia will convert it into a hurricane.
Assaults on shipping from Russia – first insurance cancellation and then sinking ships of Russia and then the West – will destroy both the economics and the capacity for Energy Imports and International Trade.
Remember when you knew Mr. Smith down the street lost his job. It was because he was always home during the day. Now, most everyone is so we don’t know who’s really unemployed.
Just picked up my grandsons from school and could not believe all the dads in golf carts picking up their kids. I would say 75% where men. My son works for us in sales so he picks them up most the time so maybe many work from home.
Anyone that can work from home should have a higher level of concern. Home work has value, but when times get hard the factories keep running by being there. People that have jobs that are not needed to make things (sales is one of the exclusions) can be temporarily unnecessary fast.
Couldn’t happen under a nicer Thief.
Had lunch yesterday with my sisters-in-law. The topic was the price of groceries. We all have gardens started (various sizes) as a way to offset the prices. One noted that she was in Wallyhell and was going to buy chicken breasts until she saw the price. $18.00 for not a lot of meat. I noted that buying a rotisserie chicken works out to be a lot cheaper. Coming from a large family where a lot of the groceries came from a garden, from fishing, & from hunting you get survival skills that will last a lifetime.
Large garden? Keep chickens. They eat kitchen waste.
Make eggs, then the Sunday roast… Harkening back to the days when meat was eaten once a week.
I’m hoping Democrats lose their jobs first – the few that have them and don’t work for government.
Gov’t workers being laid off, that would be a sight to see.
Never happen.
There are a lot of openings, and not all from retirement. Fed employees were mandated to take the vax, probably has something to do with what’s going on (I took a religious exemption, and only know of 2 others who did so out of 115 in our department). I know we are swamped with work and can’t get enough employees. Even with contracting out a lot of our work, we are months behind where we should be.
Baking bread is not a good example as the only fixed costs are the oven and the bread pan. So there’s a tiny margin improvement on 15 loaves over 10 loaves, but your point stands (a bit shakily but still standing).
Really, just the oven and the bread pan? LOL
Physical plant
Rent and/or depreciation
Electricity / Gas
Insurance
Permits / Licenses
Refrigeration
Equipment
Oven, Pans
Sanitation
Fixed costs are fixed costs… whether building a car or baking a loaf of bread. Same/Same
Debt service (on operating capital)
Equipment lease payments (most of the equipment is leased)
Indirect salaries including payroll taxes (the entire back office is essentially fixed cost, or maybe step-fixed)
Fleet costs (delivery trucks are usually leased)
Yes, in finance it’s called a contribution-margin analysis, and in economics it’s called marginal cost analysis. Good…
Sundance states the root cause is demand, this in turn in caused by inflation.
From a DC perspective creating inflation is a national security issue. It is first of all a way of dealing with our massive dept. It also allows room for more govt spending.. It is also a round about way of adding additional taxes on the populace.
The proof inflation is intentional is the amount of time they have taken to deal with it and the rather reserved way they have combated it.
consistent with the negative gdp print of -1.4%. the most bearish wall street firm had a recession late next year. one more negative quarter and we have a recession early this year.
bit of a black swan.
This creates a productivity drop of 7.5% for the overall business. The largest quarterly drop in productivity since 1947.
Would the 1947 drop in productivity reflect the end of WW2 contracts? So a 7.5% drop during peace time would be particularly bad.
EXACTLY!!!
When are people gonna wake up and realize that they’re doing the same thing to America that they did to Venezuela? How can anybody know this and still vote for a stinking Democrat?
Exactly!
Most of those mouth breathers probably are only vaguely aware that a place called Venezuela even exists, and have zero information about the state it is in and how that came to be.
Venezuelans were disarmed, no?
When, like in Venezuela, folks are running after garbage trucks seeking food.
Perhaps the people who are not showing up to work will lose their jobs!
add in the drag of all the DEI and ESG nonsense … workers are no longer spending 100% of their time on the service/product …
Like I say Regressives, not Progressives!
Go back 18 more years and we will be at depression era time. If they keep going we can start living in caves again. Stock up on matches, you will need fire.
These so called enlightened ones are beyond insane, they are controlled by Satan’s demons.
The mirrors are cracking and the smoke is getting thin, FJB tells us once again we just don’t know how your magic works.
As the Democrats would say, it’s not a bug, it’s a feature…
Why aren’t the Nets taking about 2000 Mules? This is to big to keep quiet
So was Hunter. That’s the reason they’re keeping it quiet. (Faux Too!)
Yup, Demand Pull v Cost Push inflation summed up nicely.
Recology of San Francisco, which provides recycling and garbage services, just negotiated a 21% wage increase over 5 years.
Additionally, I’ve heard reports that the union workers are demanding a one-time back payment of $5,000 – $10,000 for rampant inflation.
Second, southern California grocery clerks negotiated a $4 an hour wage increase, plus additonal benefits.
This is the real reason for the stock market tanking. Usually, but not always, money leaves stocks and moves to bonds. This drops rates in the short term. Rates also went up today for treasuries and mortgage backed securities (MBS). Gold and silver barely moved up today. Money will exist somewhere. Since it hasn’t moved to bonds or precious metals. For my logical mind, that tells me that money from the selloff is leaving the country. Anyone else have any contrary thoughts?
The Globalists and Federal Reserve Bank have been able to manipulate the Stock Market for a long, long time, but there is a limit to everything.
The younger generations (2010+ investing age) think they are smart for hitting the jackpot on a propped up stock market. All they had to do was put money in the stocks and the Federal Reserve propped it up, but that time is about to end. You can’t keep propping it up and have valuations that are not real. It’s like the casino’s they let you win for awhile, then they hit you hard and all that money you made during the good times, you lose and then some.
“Never underestimate Joe’s ability to fk things up.”-Barry Obama
Bank of England ‘hikes’ rates to 1% as they warn inflation will hit 10.25% this year.
‘Trapped’ doesn’t come close
Simple example of inflation: I had to call a pest management company, nice honest Christian family business that I’ve used before. They sent out an email to their customers stating that the cost of their supplies just went up 35% so they are forced to raise their prices. Also, the gentleman showed up in an economy vehicle rather than his big truck. He said he had to retire his truck due to gas prices which have more than doubled in the last 2 years. Small family businesses like his are going to hurt dearly in this economy.
Another example: Went to the store to pick up just a few items. As I was perusing the shelves I noticed that a large spray can of Lysol was priced at almost $10 for one can!!!! A carton of eggs (18 eggs) was almost $6.
Inflation is out of control and the economy is a dumpster fire. The JoeBama economic plan is hurting the very people the Democrats purport to help. No wonder they had to play the abortion card – they are out of options.
#FJB and the horse he rode in on.
Ask a Libtard what he would say about all this if Trump was in the White House instead of Biden?
There are two other silent endangering structural issues hidden in plain sight.
Employers are punished by paying matching SS/Med taxes on payroll. In one sense this doesn’t seem like much money, but depending upon the structure of the business and the normal state of accounts receivable, it can be a much larger burden upon available cash.
Sales tax, unemployment insurance taxes and payroll taxes, these are “1st dollar” expenses; i.e., the 1st dollars collected had better go to pay your “partners” first. They will destroy the business and ruin if not jail the employee fiduciary if this doesn’t happen.
One of many reasons senior corporate administration sees employment and employees as the enemy. It’s such a love/hate relationship. Same with Union Bosses and their membership.
Reminds me of what I overheard two United pilots grimacing during a walk through DFW: “Ya know, this would be a really sweet gig if it wasn’t for the passengers.”
Then you have eugenicists like Claus Schwab and his butt boy Harari.
Better wake up. They are coming for us all. It’s looking like an asymmetrical world war is on the loose.
The Great Reset can’t happen without The Great Cull. It’s that same old nasty crowd coming back again.
‘“All for ourselves and nothing for other people” seems in every age of the world to have been the vile maxim of the masters of mankind.’
Adam Smith. Chapter IV, p. 448. – The Wealth of Nations (1776) – Book III
“What we are very proud of, is that we penetrate the global cabinets of countries with our WEF Young Global Leaders. (YGL)”
Klaus Schwab (2017)
It’s all connected and it’s coming at us like freight train.
Thankfully he will die very soon!
Red in America
Stunning….Wouldn’t want to alarm anyone, but benchmark Henry Hub natural gas is knocking at the $9-per-mBtu door, up from $3 per mBtu a year ago.
Don’t worry Biden says we have plenty to ship to the European Socialists… EU, so they can bicker over our nat Gas instead of Russia’s.
Diesel prices this morning were $6.30 in Central PA.
the new new GREAT DEPRESSION has pass the point of no return….
Turkey reports annual inflation of 69.9% in April Hope it does not happen here
No surprise here: US retail diesel prices set on Thursday the 7th consecutive daily fresh record high, climbing to $5.473 per gallon, according to AAA motoring club data.
And 9 states, accounting for 35% of the US GDP, are weathering now >$6 per gallon retail diesel prices.
Gasoline is up 125% where I am at…. since potato head stole the WH….
and it’s still creeping up 10 cents a wack.
Diesel prices 6.30 in Central PA this morning. Posted above, but more pertinent here.
$5.29 today South Central OK
No more free lunches
https://theconversation.com/amp/schools-will-stop-serving-free-lunch-to-all-students-a-pandemic-solution-left-out-of-a-new-federal-spending-package-179058
Reliable source told me the local truckers have reduced loads over past several weeks. They were driving like crazy, then slowed down over past month. Mostly food products.
I am in Chicago area, so assume this is happening nationwide. Collapse is coming soon…
Three prescriptions and three Mother’s Day cards, $77. I do feel bad for a lot of people right now.
BTW, in the MORE REALLY good news category for our savings, investments and assets is that the Fed debt is now equal to $955,407 per household. So before you calculate your net worth again, make sure you deduct the nearly $1 million you owe the government to pay off the debt.
Umm…. In my defense, the F***ers tried to fire me over that covid bulls***.
So yea, I guess my productivity may have dipped a smidge. (Still 20x that of diversity hires).
I’ve yet to see a “Build Back Better” hat.
I have yet to see anything built back better!
Ask a libtard with everything going on right now and Trump was in the White House instead of Biden. “What would you say about Trump”?