JOBS, PRODUCTIVITY, AND GDP

Jim Paulsen of Wells Capital Management says he thinks there is something wrong with the  declining productivity numbers and also the low GDP.*  I've also felt that there is something wrong with GDP.**

Paulsen said he believes something is amiss because today's productivity data is out of sync with the long-term historical trend.

Throughout the post-World War II era, productivity grew faster than normal when real wages also exceeded average growth, at least until the economic recovery that began in 2009, Paulsen said. But throughout the seven-year recovery, real wages have grown above average, while productivity has lagged the historical average.*

.................................................

"If productivity is stronger, then so is growth, which might explain why profits have done so well, why auto sales are at record highs, why we've returned to full employment," he said. "It might explain a lot of things that are tough to explain if we're really only growing sub-2 percent," he said.*

(Click on figure to enlarge)

The new figures are from the Job Openings and Labor Turnover Survey, known as Jolts. The report is released with a one-month lag from the main jobs report , which showed the economy added  255,000 jobs in July. The Jolts report, which only goes through June, shows the monthly rates at which people quit one job or are laid off, and the rate at which people are hired.

The report has presented a consistently mixed picture in recent years. On the one hand, it has shown very low layoff rates, which aligns with data showing relatively few Americans have been filing jobless claims in recent months. But it has also shown the pace of hiring into new jobs has been slow to recover. Because switching jobs is one of the key ways that American workers get raises, the report helps explain why, for so much of the economic recovery, wage gains have been hard to come by.***  (Bolding mine)

I have put the final phrase above in bold because it seems to be in conflict with other reports.  Perhaps the key is in "for so much of" whereas other reports are dealing with more recent reports dealing wiht the economic recovery.

There has been a remarkable number of weeks with new unemployment claims being below 300,000:

Claims have now been below 300,000, a threshold associated with a strong labor market, for 76 straight weeks. That is the longest such stretch since 1973, when the labor market was much smaller.

The labor market is now viewed as either at or near full employment, suggesting limited scope for more declines in claims.****

(Click on figure to enlarge)

* http://www.cnbc.com/2016/08/12/heres-why-productivity-isnt-growing-the-data-are-wrong-says-paulsen.html
** http://stopcontinentaldrift.blogspot.com/2016/08/economy-better-than-gdp-suggests.html
*** http://blogs.wsj.com/economics/2016/08/10/rate_of_layoffs_matched_a_record_low_in_june/?mod=djemRTE_h
**** http://www.cnbc.com/2016/08/18/us-weekly-jobless-claims-aug-13-2016.html