SILVER SPRING, Md. (AP) – US productivity rose at a rate of 7.3% in the second quarter as hours worked nearly halved, the biggest drop since the government began tracking 70-year data before.
The Labor Department said Friday that production fell 38.9%, also the largest decline ever recorded due to a 43% drop in working hours, with the coronavirus epidemic causing economic losses across the United States.
Productivity gains were the biggest since 2009. Labor costs also skyrocketed, up 12.2%.
The Friday report is the first quarterly yield estimate and follows the first quarterly decline of 0.3 percent. The increase in labor cost, the biggest since 2014, after increasing 9.8% in Q1 – 3.
Defined as the quantity of output per hour worked, productivity is key to raising living standards, and slowing growth in recent years is the main cause of stagnant wage growth. Productivity has lagged largely behind during the 11-year record-long expansion after the Great Depression, puzzling economists.
From 2000 to 2007, the year when the Great Depression began, annual productivity growth averaged 2.7%. But since then, yield has fallen to about half that rate, up at an average annual rate of 1.4% between 2007 and 2019. The 1.9% rate in 2019 yielded some peanuts. Although productivity is on the rise, the coronavirus pandemic hit the first quarter of 2020, wiping out the economy and knocking out virtually every economic indicator.
Economists have warned that economic disruptions caused by coronavirus are likely to hamper yield in the coming quarters.
Last month, the government reported a staggering 32.9% drop in second-quarter gross domestic product, the value of goods the country produced during the April-June quarter. the biggest drop of records since 1947, and is almost entirely related to radioactive dust from the coronavirus pandemic, which temporarily and permanently shut down business, leaving millions of workers in disrepair. Karma.
The Trump administration has predicted a third-quarter economic recovery, but many economists believe the economy cannot fully recover until the virus is mostly defeated.
The government will release a second yield estimate next month.