U.S. widget output in the nonfarm business sector increased 1.8 percent in the second quarter of 2011, according to a report from the Bureau of Labor Statics.
By “widget,” we mean the output of real goods and services by the domestic economy. Exports, federal government spending, private inventory investment, and nonresidential fixed investment were the widgets that pushed up the output number.
Even though widget output increased in the second quarter, people increased their hours worked by 2 percent to create those widgets.
That means productivity dropped at an annual rate of .3 percent for the second quarter, according to the BLS.1
“If output increases but hours increase more, then you have a decline in productivity,” said BLS public affairs officer Gary Steinberg.
“If it takes you more hours to produce something, that’s lower productivity.”
The increase in output is based in part on an advanced estimate of the GDP by the Bureau of Economic Analysis.2
The productivity calculation is subject to change, because the BLS receives data from other agencies and compiles the data to get the calculation, Steinberg said. Any time new data come in, the productivity number gets revised.
The revised productivity calculation is set to come out in early September. The second estimate for the second-quarter GDP will be released Aug. 26.
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