{"id":1925982,"date":"2023-05-07T01:13:21","date_gmt":"2023-05-07T05:13:21","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-labor-productivity-dips-and-costs-surge-in-first-quarter-2023\/"},"modified":"2023-05-07T01:16:43","modified_gmt":"2023-05-07T05:16:43","slug":"u-s-labor-productivity-dips-and-costs-surge-in-first-quarter-2023","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-labor-productivity-dips-and-costs-surge-in-first-quarter-2023\/","title":{"rendered":"US labor productivity falls, costs rise in Q1 2023."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fu-s-labor-productivity-dips-and-costs-surge-in-first-quarter-2023%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1925982&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Labor Productivity Falls and Labor Costs Rise, Posing a Challenge to the Federal Reserve<\/h2>\n<h3>The Numbers<\/h3>\n<p>The first quarter of 2023 saw a decline in labor productivity by 2.7 percent in the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-story-behind-the-governments-july-jobs-report\/\" title=\"The Story Behind the Government\u2019s July Jobs Report\">nonfarm business sector<\/a>, according to a May 4 press release by the U.S. Bureau of Labor Statistics (BLS). This is the fifth straight quarter that productivity fell on a year-over-year basis, the longest stretch of such declines since the series began in 1948. Meanwhile, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/productivity-crashes-more-than-expected-worst-decline-since-1960\/\" title=\"Productivity Crashes More Than Expected, Worst Decline Since 1960\">unit labor costs<\/a> in the nonfarm business sector increased by 6.3 percent in the first quarter of 2023, reflecting a 3.4 percent increase in hourly compensation and a 2.7 percent decrease in productivity. <\/p>\n<p>In the manufacturing sector, labor productivity fell by 1.3 percent in the first quarter of 2023 while unit labor costs rose 3.4 percent during this period.<\/p>\n<h3>The Challenge<\/h3>\n<p>The Federal Reserve has been <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-reserve-delivers-bad-news-about-expectations-for-inflation-raising-interest-rates-report\/\" title=\"Federal Reserve Delivers Bad News About Expectations For Inflation, Raising Interest Rates: Report\">raising interest rates<\/a> in an attempt to control persistent, decades-high inflation. However, higher labor costs pose a problem for the Fed. While it helps workers by ensuring they have more money to spend, rising wages can also keep pushing up prices, making it hard for inflation to get back to the Fed\u2019s target rate of 2 percent. Annual inflation has remained at or above 5 percent for every single month since May 2021 through March 2023.<\/p>\n<p>Last month, James Bullard, president of the Federal Reserve Bank of St. Louis, suggested that the Federal Reserve should keep raising interest rates as long as the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/u-s-labor-productivity-dips-and-costs-surge-in-first-quarter-2023\/\" title=\"US labor productivity falls, costs rise in Q1 2023.\">labor markets remain strong<\/a>. Meanwhile, the May 4 BLS report notes that while the manufacturing sector output and hours worked both grew at an annual rate of 0.3 percent since the fourth quarter of 2019, labor productivity has had \u201cno growth since the start of the business cycle.\u201d<\/p>\n<h3>Job Losses<\/h3>\n<p>While labor productivity dips and the Fed continues to push up rates, job losses are accelerating. According to a May 4 report by Challenger, Gray, &#038; Christmas, U.S.-based employers announced 66,995 job cuts in April 2023, which is a 176 percent increase from April 2022. This is the fourth consecutive month this year that job cuts were higher than the corresponding month a year earlier. In the first four months of 2023, employers have already announced 337,411 layoffs, which is up 332 percent from the same period last year.<\/p>\n<p>The retail industry accounted for the highest job cuts in April, announcing 14,689 layoffs. This was followed by the tech sector with 11,553 job reductions and the health care\/products sector with 6,184 cuts.<\/p>\n<p>More job losses might be coming in case the U.S. debt ceiling is breached, according to a May 3 report by the White House Council of Economic Advisors. Treasury Secretary Janet Yellen has already warned that the United States could default on its financial obligations as early as June 1. According to the report\u2019s worst-case scenario, which involves the United States failing to raise its borrowing levels for over three months, around 8.3 million jobs could end up being wiped out, with the unemployment rate rising to 5 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Labor productivity fell during the first quarter this year while labor costs rose, posing a challenge to the Federal Reserve as it raises interest rates in an attempt to control persistent, decades-high inflation. Nonfarm business sector labor productivity, which measures the hourly output per worker, declined by 2.7 percent in first quarter 2023, compared to<\/p>\n","protected":false},"author":1,"featured_media":1925983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[8016,7969,3836,4832,8182,5319],"class_list":["post-1925982","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report","tag-8016","tag-costs","tag-falls","tag-labor","tag-productivity","tag-rise"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1925982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1925982"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1925982\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1925983"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1925982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1925982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1925982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}