Saturday, September 9, 2017

"Don't Look Now," Bloomberg says, "But Productivity Is Finally Rising"

At Bloomberg: Don't Look Now, But Productivity Is Finally Rising.

I told you so.

The Bloomberg post is date 7 September 2017.

On 17 November 2016 I explained Why Labor Productivity is Low, and said

We are in a transition now that will soon give way to a more vigorous economy. Debt Service is beginning to increase, and productivity will soon be on the rise.

On 21 August 2016 I looked at productivity (real output per hour) for 22 data items (five years plus) beginning in 2011Q1. The linear trend ran low (near 0.5 percent growth) and flat.

I looked also at the nine quarters from 1993Q1 thru 1995Q1. The linear trend ran low (near 0.5 percent growth) and flat. But during the nine quarters from 1995Q1 thru 1997Q1, the trend increased from 0.5 percent to nearly 3%. "You never know," I said.

"To my way of thinking," I wrote,

Graph #1 (our time) is very much the same as Graph #2 (the early 1990s). But I think we are at the end of Graph #2 and ready to start Graph #3 [productivity improvement]. That makes all the difference.

"Oh come on," you are saying. "Graph #2 shows only a couple years. Graph #1 shows almost six years. There's no comparison. The slump is endless this time."

It's not endless. That's the point. The quiet time before the vigor is longer this time -- about 2½ times as long, my guess. I'm telling you we are at the end of the quiet period. Soon we will see productivity start to climb, just as on Graph #3.

On 7 April 2016 -- almost a year and a half ago -- I said

I predict a boom of "golden age" vigor, beginning in 2016 and lasting eight to ten years. It has already begun. In two years everyone will be predicting it.

And on 3 March 2016, in We are at the bottom now, ready to go up, I said

This is not going to be your typical anemic recovery. This is going to be the full tilt, rapid output growth, rapid productivity growth, high performance boom.

I can't promise you it'll last long, because the level of debt is already very high. But it'll be a good one while it lasts.

On 7 September 2017, Conor Sen of Bloomberg said Don't Look Now, But Productivity Is Finally Rising.

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