Dollars and Jens
Friday, November 03, 2006
As they've been saying in the news, unit labor costs were up at a 4% clip while productivity was completely flat. What they haven't noted is that, in manufacturing, productivity gains were phenomenal, and unit labor costs actually declined.
Which, of course, means it was that much worse in the service sectors, where productivity must have actually declined.
While I'm here, I'll note that initial claims for unemployment were the highest they've been since July, and will note that they basically look like 315,000 + noise, and make the last couple weeks look like 315,000 - noise. If you smooth out the weekly fluctuations, it's stuck awfully close to 315,000 since the beginning of June, and the most recent number is not inconsistent with its continuing there. That the job losses haven't really started yet seems to me the most reasonable bet, though I expect the continued tightening of the labor market will end not with a bang, but with a whimper.