Q1 Productivity Collapsed Most In Over 60 Years; Goldman Fears Consequences

Tyler Durden's picture

The official measure of Q1 productivity growth currently looks likely to be revised down to almost -6% (annualized) - the worst in almost 70 years. As Goldman points out, even on a longer-term basis, the 4-, 8-, and 12-quarter trends are all in a 0.2%-0.6% range when the Q1 estimates are included, dramatically below consensus 2% estimates of the long-term trend. While Goldman notes productivity is a very noisy series, because it is calculated as the difference between noisy GDP numbers and noisy hours worked numbers; if these numbers are an accurate representation of the long-term trend, the implications for the long-term growth in US living standards would be very negative.




Of course, it wouldn't be Jan Hatzius if Goldman didn't end on an optimistic note...

There are good reasons to expect further improvement in productivity growth over the next few years. In particular, stronger business investment is likely to boost the growth rate of the capital stock and therefore the contribution of capital deepening to productivity growth.


Whether this will be enough to boost the productivity trends over the cycle as a whole to our longer-term estimate of 2% or a slightly lower number is admittedly less clear.

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TeamDepends's picture

Goldman fears/knows nussing!!!

Keyser's picture

All those part-time jobs created as a direct result of Obamacare are doing wonders for the economy... /s


knukles's picture

Seriously, "the implications for the long-term growth in US living standards would be very negative."

Would be?
Fuck you guys been?
Oh yeah, the Hamptons.
Sorry, I forgot


And whatchu guys thinks gonna happen to productivity with the 2 legged sand flea infestation that's costing Billions upon Billions?  Yeah, that's right.  Another fucking non-productive drain upon the already hard pressed taxpayer burden.
Cloward Piven at it's Best.
The Decline of Empire.

Nero Knew!
Party at the Peak, because It Don't Get any Better than This!

wallstreetaposteriori's picture

Big Deal.... largest negative drop Quarterly GDP since 2008 = bullish.... largest drop in productivity since 1947 = uber bullish.... fuck this market....

Quinvarius's picture

Cloward Piven has a glaring flaw.  You can never be communist enough to keep the next most radical group from using Cloward Piven on you.  

Cognitive Dissonance's picture

Yeah, but if you factor in the hookers and blow it was +9.

The Alarmist's picture

True dat!  It's one of the few corners of the economy where you still get value for money, what with all the new girls "dropping" out of the official labour force and all the cheap smack from Afghanistan hitting the streets.  

Hookers and blow for everyone!

analyzer_66's picture

Productivity, the biggest red herring in any economics discussion, yet Corp Amerika needs something to justify meager wage increases that don't keep pace with the cost of living.  Aren't we flipping enough burgers and selling enough life insurance policies ?

buzzsaw99's picture

goldman should know about declining living standards in the usa, they orchestrated the collapse.

knukles's picture

One of my closest buds (No, not a liberal progressive, duh) seems to have of late been taken to the frame of mind that Goldilocks did in fact engineer the downturn.
I'm so proud of him....

lotsoffun's picture

their good brother hankie paulson the then 2008 sec. of treasury (whose 100MM+ net worth was in a 'blind trust' (in goldman stock perhaps??))  engineered a $180 billion dollar bailout for AIG of which 80 billion was funneled back into goldman.

knukles - it doesn't matter.  even congress doesn't understand.  it's all really so complicated......

shame, but that's the way it is.  and if bambie can pull it off, he will have no trouble finding millions of idiots to go try and fight russia and china.


Rehab Willie's picture

Goldman wants moar war

frankTHE COIN's picture

" It's Unbelievable. Fewer Dropped Calls. Better Call Quality"
Jan Hatzius

lasvegaspersona's picture

hookers is one area in which increased productivity is a big negative...as in...wow the was the quickest most efficient 'service' I've ever had...

Cognitive Dissonance's picture

Clearly you've never had a $5 BJ. Not that I would know anything about that. :-)

nosoeawe's picture

well according to some, it's the weather's fault. that's about as good as a lie you'll get from the big eared, pea brained, jihadist in chief and his little midget albino minion

NOTaREALmerican's picture

Productivity?  How do you measure that when most "activity" is banksters creating scams. 

Get to work you scammers, you're letting us down!

LightsOut's picture

"We need to liberate people from job-lock and let Americans follow their dreams" ~ Pelosi

Consider us liberated.

nmewn's picture

"The official measure of Q1 productivity growth currently looks likely to be revised down to almost -6% (annualized)..."

Wait, wut?

knukles's picture

Just you wait till all those teenie tiny scabatious paws start scrambling for every last fucking Twinkie on every last EBT eligible shelf.


It's time for the "The Kids Grab the Twinkies While I Grab My Ass Game", brought to you by Monsanto and the Dpt of HHS

SweetDoug's picture




Productivity will be great, with the robots that are coming!

Employment on the other hand… Not so much.



Yen Cross's picture

     So why's the squid calling for ES 2050 EoY?

knukles's picture


BeetleBailey's picture



I just got an email from my Australian FX broker, telling me they are suspending doing business with US clients. I am sure it has to do with FATCA. From the email;

"Following a decision from our board members, we will no longer be servicing US clients. This will not be taking place immediately and an email will be sent out to you in the next few days with further information."

Australia's FATCA agreement went into force July 1.

I need a new FX broker. ANY assistance you can lend would be of great help.




Racer's picture

Business investment

Translation: more stock buy backs to fudge numbers

Oh Sh!t we only have 1 share left to buy back, what the F@ck do we do now?


daveO's picture

Sell it to the FED. Mission Accomplished!

I Write Code's picture

So lay off an engineer at $100k, hire an H-1B at $60k, and the engineer works at Burger King for $20k.  Even if you believe productive matches compensation, the average has just dropped from $100k to $40k.

Welcome to the Obamanation.

Keep on Yellen.

The Alarmist's picture

It's more llke "lay off US citizen engineer for $150k, hire H1B at $90K, and US engineer goes to work on Wall Street for $200k until the Banksters figure out they can outsource the number crunching to someone actually sitting in India and do it for only $60k.

lotsoffun's picture

nice dream mr. alarmist - but either you are a paid troll - or out of touch.  wall street is hiring one thing only these days.  h1b cousins from gandhi.  they are all very nice.  nice people.  and there are a billion of them willing to come here and work for ALOT less.  and do nothing.  because the system right now is so screwed, it is only about managers being able to say 'look how many people i manage for so little'.  measuring output, production is not empirical.


starman's picture

My favorite Amercian Corp so far is GM! Total domestic sales in 08 - 8million units. 2013 domestic sales - 4million units. Almost forgot 28million recalls to date!


Wahooo's picture

Note to self: should've been a government worker or a robot. Oh well.

FreedomGuy's picture

I have come to believe that the only sizeable pool of what we would call good jobs in the sense of good pay, reasonable hours and generousb benefits is in government. Right now the oil industry might be rocking but they boom and bust regularly, too.

I have distant relatives who work for the Feds and I cannot believe how much they make and how generous their noncontributory pensions are. They make more than primary care physicians which is all the more galling when you consider that government workers are economic parasites. Speaking in general terms they not only produce nothing but they are an actual burden and hindrance to those who do...even if you agree with their mission.

I should look it up but I would like to see the total size of government employment at all levels, federal, state, county, VA, teachers, etc. in relation to the private sector. I know they make double the average person in the private sector in wages and benefits.

My belief is that the ticks of government are about to drain and kill the private sector cow.

gosh's picture

Time to buy stocks!

SmittyinLA's picture

"Mission accomplished"

Thank you GW for the endless Socialist criminal invasion, without 8 years of endless criminal invasion from you & Dick (die already) Cheney the Kenyan Communist half breed hater-Muslim could have never been elected. 

AdvancingTime's picture

America imports around five hundred billion dollars more from other countries every year than they export. This means we have a giant trade deficit, when we add this to our enormous government deficit it is easy to see that we are living far beyond our means.

The Fed has been superbly entrepreneurial when it comes to Ponzi schemes or pseudo-economics hocus-pocus that has allowed the current situation to develop. The Fed  must at some point begin to ponder a real exit strategy and end the massive and corrosive stimulus that the economy has come to expect. To make matters worse little has been done to address our structural problems and make America more competitive, this will massively thwart growth going forward. More on this subject in the article below.


Bear's picture

Today's Capital Stock = iPhones?

Are smart phones really smart for businesses?

ShrNfr's picture

Did this count Michelle's hastags?

Make_Mine_A_Double's picture

You think those 90 million Murikans watching TV and given each other Pelosi funemployment reach arounds had anything to do with productivity collapsing?

spinone's picture

Bullshit.  Corporations have captured all the productivity gains.  Real wages have not increased since the 1970s.  This has no implications for living standards except for the .01%

daveO's picture

Banksters have captured all the gains. 40% of the US economy is finance. The parasites are breaking the dog's back.

Government needs you to pay taxes's picture

Why work when you can collect housing vouchers, EBT, and bang hoes/drink malt liquor/thug out 24/7/365?

FreedomGuy's picture

This is actually a serious question. I look at the long hours and just PITA factors of dealing with government at all levels, whether it is registering my car, trying to do my taxes properly or taking another test on the new regs in my industry and I am reminded of Orwell in 1984, "Only proles are free."

It is tempting to opt out.

allgoodmen's picture

Do it now, do the above, perform barter/under the table work for your spending dollar

The main danger is fiding something to do with all your free time

Pelosi is right

(not </s>)

FreedomGuy's picture

I think about it every day.

o2sd's picture

Stupid measurement. For two decades now, America has been borrowing money from Asia to buy products from Asia. All this spending of borrowed money counts towards GDP. The borrowing is continuing, it is the spending that has stopped.

AuEagleNest's picture

If productivity is down we obviously need an across-the-board pay cut of 20% for the 99%. (Beatings continue until morale/productivity improves)