Worker productivity up again

In the fourth quarter of 2011, American workers put in 2.9 percent more hours and produced 3.6 percent more stuff. As the U.S. economy continues its slow recovery, at some point employers will have to stop relying on increasing productivity and hire.

The Pulse is up today on news that the American worker is finally running out of productivity bandwidth. According to a report from the Bureau of Labor Statistics, U.S. workers were 0.7 percent more productive in the fourth quarter of 2011, down sharply from previous quarters.

Productivity, as the Labor Department explains in its report, follows this formula: “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.”

Today’s uptick in productivity is the result of Americans working 2.9 percent more hours and producing 3.6 percent more snorkels, or Chevys, or cleaner swimming pools, or whatever they work on all day. Our 0.7 percent hike in productivity in the fourth quarter comes after a 1.9 percent jump in the third, so while we’re doing more, we’re doing less of it.

So what? Well, we’re tapped out -- that’s what. But being pushed to a limit could be a good thing, because with promising signs of growth on the horizon, the next logical step for growing businesses is to hire more Americans.

About the author

Joel Patterson is the Associate Producer of Marketplace Money.

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