Hourly Compensation Crashes Most Ever, Labor Costs Drops By Most In 4 Years, Manufacturing Compensation Plummets By 7%

Tyler Durden's picture

So much for the thesis of declining labor slack and rising labor leverage. Moments ago the BLS reported its Q1 labor costs which poured cold water over all recent hypotheses that the US worker's plight is improving. It isn't: productivity increased by 0.5% in Q1 in ling with expectations of 0.6% (on what is not exactly clear - everyone on their iPhones?) but it was labor costs which plunged -4.3% on expectations of a +0.5% increase driven by a 3.8% collapse in hourly compensation that was the stunner. This was the biggest labor cost drop in four years and the biggest collapse in hourly compensation in well, ever and confirms our observations from the last NFP report that quantity gains in jobs continue to be offset by quality declines in actual worker pay. As a reminder we were scratching our heads following the soaring Q4 labor cost and declining productivity data which made no sense in the general context of deteriorating labor conditions. Following this print, it all falls back into place and confirms the Q4 data was nothing but an outlier. Also,this may be the end of the core thesis behind David Rosenberg's recently developed reflationary argument.

But nobody was as punished as manufacturers who as ADP reported moments ago are not only losing their jobs, but are getting much less:

Unit labor costs in manufacturing decreased 10.0 percent in the first
quarter of 2013, due to both the 3.5 percent increase in productivity
and a 6.9 percent decrease in hourly compensation.

Oh well, time to export some more jobs to China or Greece, even as corporations focus on buybacks and dividends, instead of investing in growth CapEx or retaining workers. If one needed an indicator of what end demand truly looks like, this is it.

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transaccountin's picture

yo what aboutz the record CONfidence numbers. i make less i feel good weeeee

DaddyO's picture

Today, same as yesterday...It appears the the PM Algo's are running the same as Monday! When the news becomes irrelevant, the Algo's just revert...



BraveSirRobin's picture

Sure the have great confidence . . . that everything is going to hell.

insanelysane's picture

I think there are legit reasons for the confidence numbers.

Self reliant makers are confident they own everything they need and know they can out perform other makers for scarce jobs.

Remaining makers are just waiting for an excuse to become a taker and are confident the gov teat is sweet.

Takers are confident that they are going to get more and more from the gov teat.

AlaricBalth's picture

These five questions, surveyed from a random sampling of about 1600 households, determine the Consumer Confidence Index. With the help of the MSM, corporate Bernaysian techniques and the Ministry of Truth in Washington, consumer confidence can be easily manipulated upon those who are unaware. 


  • Do you think that the general economic situation in our country has improved, deteriorated or remained the same in the past twelve months?
  • What is your opinion on the general economic situation in the twelve months to come?
  • In your opinion, has the financial situation of your household improved, deteriorated or remained the same in the past twelve months?
  • How do you evaluate the financial situation of your own household in the next twelve months?
  • Do you think it is the right or wrong time to buy expensive items like furniture, a washing machine or a television set?   
  • SheepDog-One's picture

    They must be puttin moar alcohol content in the Pabst Blue Ribbon or something.

    augustusgloop's picture

    confidence is the prol thinking it's so bad it can only get better - like the part time school bus driver taking out a car loan w/ his shotgun as collatoral...

    "You begin to try to rationalize, well maybe it was our time for the sun to shine on us."


    Dude...sun is not shining on the dead poultry factory workers in China, garment workers in Bangledesh, or Coptic trash collectors in Cairo. 

    Jason T's picture

    Productivity has sucked since 2010.. have we peaked?  this is a big deal we can't get productivity up more meaningfully .. and I have very low expectations we as a country will/can.   


    At least its in our own power to grow productivity in one's own home economy..whew.

    Skateboarder's picture

    Peak productivity coincides with peak oil. The only way to see similar or higher productivity again is for global adoption of another 100+ year energy source.

    ElvisDog's picture

    Productivity is like anything else - it can't grow exponentially forever.

    Marley's picture

    You mean people are working in America?  Which one?

    GetZeeGold's picture



    Susan Rice just scored a pretty sweet gig.

    azzhatter's picture

    threesome with Moochelle and Jarrett?

    Ms. Erable's picture

    Thanks for making me dry heave.

    Winston Churchill's picture

    Executive priviledge in 3,2,1.

    Obozo is trying to cover his tracks on Bengazhi.

    LawsofPhysics's picture

    Correct, in this position, Rice will not testify.

    duo's picture

    at the company making the nightsticks used by the police to beat the unemployed.

    HelluvaEngineer's picture

    Funny.  Everyone I talk to says they are doing great.  What inflation? 

    Meanwhile I'm lucky to get a COL increase and living hand to mouth trying to take care of two kids.  On the bright side, my property taxes went up due to the housing recovery miracle.  Winning!

    Skateboarder's picture

    Less is more! 30,000 > 60,000. Y'all oldskoolers aint got the message yet. We's in different times now.

    mess nonster's picture

    Oh yeah, I agree. I have more leisure time now that business volume for me has declined by about 1/4, and I'm the only show oin town. Fuel costs eat up a full 1/5 of my gross income, but hey, my carbon footprint is Lilliputian.

    A bottle of fermented tea costs almost five bucks at the store...why can't I make this shit at home?

    Meanwhile, deflation eats away at earnings wehile Peak Oil eats away at savings...bullish!

    fonzannoon's picture

    "Over the course of your lives you will experience withering, but stealthy attacks on your quality of life, as government attempts to manage it's faltering finances. You will see declines in the quality of healthcare, the quality of education, the quality of public safety, and the quality of our currency"

    "of course, this is a false prophecy, I am simply describing what is already happening."


    disabledvet's picture

    hate to say i love this comment...but i really, really, really do. the rumor is the QE ideas coming out of San Fran are TRULY staggering. "just how big can you infinitize that thing?"

    The Carbonator's picture

    Wow at 14:00 it gets very interseting.


    You can see the Soviet Style tactics of the Obama Administration via the IRS as they Audit the shit out of him.


    Imagine if he was a tea party guy or conservative.  He would have been butt-fucked with a stick and crazy glue.

    MrBoompi's picture

    Real unemployment is still brutally high. And unlike the gold and silver markets, supply and demand do affect the wages offered for the mostly service related jobs that are being created.

    Bearwagon's picture

    There goes the purchasing power of the average wage-earner ...

    yogibear's picture

    Go long payday loans!

    It's going to be great for bankers and loan sharks. 

    People will have to borrow more just to make ends meet. 

    The ultimate goal of the federal Reserve and it's member thugs.

    LawsofPhysics's picture

    This surprises you?  Many countries have been borrowing money, just to pay interest, how insane is that?

    docj's picture

    But they'll make it up in volume, of course.

    So totally freaking screwed, we are.

    the not so mighty maximiza's picture

    feeling so confident now is the best time to buy a home

    dksrox's picture

    Where's Hari Seldon when you need him???????

    apberusdisvet's picture



    DormRoom's picture

    Matt Damon's new movie, Elysium, is the logical conclusion of the current Zeigeist.  The 0.1% build a space station where they live opulent lives while extracting resources from the 99.9%.  It's the ultimate gated paradise.



    SheepDog-One's picture

    If they think being on a space station, or deep underground military bunker is 'oppulence' in any way then they're completely insane. 

    But the theme IS right, a small group of 1 species on earth has been living oppulently off all the rest for some thousands of years, largely un-noticed and living safely in the shadows...until recently.

    DormRoom's picture

    lol. watch the trailer.  #occupy_wallstreet => #occupy_earth

    Herd Redirection Committee's picture

    SD1, people knew what was going on back in Medieval times.  They used to kick the usurers and early credit card pioneers right out of town.

    Somehow that knowledge got lost, and we were convinced that our ancestors were silly, superstitious bigots.

    Race Car Driver's picture

    > Somehow that knowledge got lost ... .


    IMO, that was the intent of the Dark Ages. First they burned the library at Alexandria - then they sequestered everything else under the Vatican. It may still be there, who knows, but the long story short is that over the last thousand years (a very long time in Man years), Man has forgotten who he is and where he comes from because it's all been erased from our collective memory on purpose and for the purpose of control. He who controls the past, makes the future.

    Herd Redirection Committee's picture

    The Holy Trinity = Mind, Body and Soul (forget the other trinity they taught you)

    Pythagoras believed in reincarnation.  Early Christians believed in reincarnation (metempsychosis).

    Personally, believing in reincarnation means I want to make the world a better place for my ancestors, and for me, too!

    cynicalskeptic's picture

    Belief in Reincarnation leads to a very differnet approach to life and living.  You WILL be coming back so you want to leave things better - and since you ARE accountable for your life, you WILL suffer the consequences of your actions (now or in the future).  The ledger book is always open - there is no 'forgiveness' - you need to redeem your past bad acts through good ones.   It's a very pragmatic and rational approach to life.   YOU are accountable for YOUR life and actions.   And - this is a notable departure from most other approaches - there is ALWAYS hope.  Even if you have made a total mess of this life, are irredeemable, serving life in prison for horrendous crimes, death is NOT the end.  You will have other lives to offset past wrongs.  

    BUT if you think that living a 'good' life leads you to even 'better' future lives in a material sense, you're very wrong.... the whole point is 'learning'.   And things even out.  If you've had a very good material life this time, odds are you're going to be reminded pointedly JUST how 'goopd' in the next which will likely be one at the opposite end of the scale.   So all thos epseudo Calvinist types who think they have a 'good' and affluent life BECAUSE they are 'deserving' - who might think they will have even 'better' lives in their next life - are in for a rude shock.

    fonzannoon's picture

    LOL the problem with "Elysium" is that they have Matt Damon cast incorrectly.  There is no way he can save us in that role. I prefer him as the southie cop with the rough upbringing. This way I feel more connected to him.

    Bobbyrib's picture

    Yeah, the trailer takes a turn for the worse, when they start to install that TV in the back of his head and a robotic arm, if I am not mistaken.

    Zero Point's picture

    Unfortunately for the 0.1%, the 0.001% view them as vermin just the same as the rest of us.

    No space stations for them I'm afraid.

    They can cower underground for a while I guess.. Until their hired protection realises it's all over.

    cynicalskeptic's picture

    I thought the 0.01%  cut a deal with one of the alien groups out there - TPTB get refuge in exchange for turning over an earth humans can no longer inhabit (though it's still usable for the aliens in question).  The rest of the species gets turned into.... well, best not to think about that.

    SheepDog-One's picture

    It's like watching a building falling to pieces while all cameras focused on 1 guy on a scaffold with a hammer and nail keeps yelling 'DON'T WORRY! I GOT THIS SHIT!'

    Bearwagon's picture

    Yeah, and the print on his shirt probably reads: "It's Tuesday!"  ;-)

    Dr. Engali's picture

    Cramer is yapping about a housing boom and how we should not even be talking about ADP, it's a "side show". The assclown says the only number that matters is non-farm payroll. What a fucking moron.

    azzhatter's picture

    Cramer still alive? Thought he died of fucktardinitis

    fonzannoon's picture

    whatever does not kill you makes you moar fucktarded.

    Its Only Rock N Roll's picture

    lol...only in America can that man still command an audience...very sad

    SheepDog-One's picture

    Lehman is safe! Buy it here at $55! Don't worry in a few days it won't be -0- or anything!

    Fuckin Cramhole...