Nonfarm business sector labor productivity increased at a 2.3 percent annual rate during the third quarter of 2011, the U.S. Bureau of Labor Statistics reported today, with output and hours worked rising 3.2 percent and 0.8 percent, respectively. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2010 to the third quarter of 2011, output increased 2.4 percent as hours rose 1.4 percent, resulting in a 0.9 percent increase in productivity. (See tables A and 2.) Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.
The productivity measures released today are based on more recent and more complete data than were available for the preliminary report issued November 3. (See Revised measures.)
Unit labor costs in nonfarm businesses fell 2.5 percent in the third quarter of 2011, reflecting the 2.3 percent increase in output per hour combined with a 0.2 percent decline in hourly compensation. Unit labor costs rose 0.4 percent over the last four quarters. (See tables A and 2.) BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.
This is deflation in the economic sense. That is, you produce much more with your labor and are paid slightly less — on balance you receive more per unit of labor output.
In this case you produced on a wage-hour adjusted basis, 2.3% more (annualized) than you used to. Note very carefully that this output improvement per-unit-of-labor-cost comes as a consequence of your efforts, and thus it belongs to you.
What this means to you, the common man, is that you should be seeing an approximately 2.3% deflation in prices overall. That is, the CPI, to be neutral on an economic balance basis, should be reflecting a 2.3% decrease in the cost of everything bought, because everything bought has to be made, and thus labor always is the source of economic output.
Well, how’s that been working out for you folks?
If you want to know why you have continually seen your standard of living destroyed over the last 30 years, here’s your answer in bright white-hot lights. Your productivity increase has been stolen by the banks and governments of the world — it is taken from you by compounded inflation!
Let’s assume a 2% productivity increase per year over 30 years. Let’s also assume a 2% inflation rate over 30 years. This is what it looks like, starting with a baseline of “10,000”:
Your cost of living has gone up by 78% in notional dollar terms but it should have gone down by 44%!
The spread between those two lines was literally stolen by the banks and government acting intentionally as a group. They defrauded you, stealing your economic output and improvement in productivity, using it to hide the impossibility of continual deficit spending. Summed, the line is flat — but it should not be; that improvement in standard of living belongs to you, not them.
This morning Obama’s lap-dog spewing spokesperson was on CNBC telling us that we must have higher taxes on “rich people.” This is just another sop to attempt to extend the ponzi scheme a bit further in an attempt to deflect attention from the above chart — the truth of how your wealth has been serially and intentionally stolen by taking from you that which is rightly yours — the natural mild deflation that comes from improvements that you generate through increased labor productivity.
That which you generate through your labor is your property and it has been stolen from you.
You’re being screwed by the politicians and banksters through an active and intentional series of confiscations of your labor engendered through manipulation of the nation’s currency, enabling trade, tax and government spending policies that cannot work in the long term. Over the last 30 years you should have seen your purchasing power increase by nearly 100%. Instead your purchasing power has been robbed from you through intentional inflationary policies, depriving you of the fruits of that productivity improvement.
Wake up America.