Poor Productivity


During Q1 2014, GDP declined at an annualized rate of 2.9% while employment growth increased at a rate of 1.5% meaning more workers produced less stuff and labor productivity collapsed. The last time GDP fell this much and employment increased was Q1 1974, after OPEC quadrupled the price of oil following the Arab oil embargo. Absent a shock like that, I expect both productivity and GDP to be upwardly revised.

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