The National Bureau of Economic Research lists the Great Depressions birth and death dates as December 2007 and June 2009, respectively – Q4 2007 to Q2 2009. That means our current economic expansion has been continuing from Q3 2009 until today.
Ready for your weird economic statistic of the day (week?)? Let’s talk about Economic Productivity – literally, the output per hour of a worker (100 means ‘2009 average’).
In Q4 2007, output per person was 96.825. In Q2 2009, output per person was 99.416. Okay, so it increased during the recession? Fine.
In Q3 2009, output per person was 100.994. In Q2 2012, it was 105.044.
Today (well, Q2 2013)? 105.380.
The Productivity Freeze
The graph above is the output per hour of all workers, relative to 2009 output levels.
Other than the weirdness I mentioned in the introduction, you’ll notice a bit of a depressing trend: the last two recessions (denoted by the darker grey shading) were marked by relatively large increases in productivity. Why depressing? Well, the fact that it took a recession and layoffs in order to increase productivity (too many chefs in the kitchen?) could be a sign that the labor market can’t properly regulate during the boom times.
There is a bit of evidence for that assumption that can be seen directly in the graph. All the previous recessions saw moderate declines in worker productivity, some with an increase in productivity near the end of the recession. The tech bust and the Great Recession? Much faster productivity increases than the preceding boom times.
And How About Today?
Maybe it’s harder to fire people today, or there’s a talent shortage, or there’s a fundamental shift in the labor supply. I hate to gloss over that important argument, but let’s concentrate on the last year – output per worker has pretty much dried up.
So, dear reader, what’s going on? Have we entered another slowdown? Are we losing experienced workers (and how does that mesh with our recent 2 part series on the Baby Boomers not retiring)? Are we waiting for the next big technological breakthrough? Do we need more sectors rotating to be strongest?
Let’s hear your theories!