Productivity and Growth Topic Index

EconData Online keeps you informed on today's most crucial economics data. Steve Hackett and Bud Culbertson (Humboldt State) provide commentary, analysis, and current and historical data. Return to EconData topic index.

Data Connections and Additional Resources
Average Weekly Hours, Manufacturing

In the early and uncertain stage of a growing economy, employers will tend to increase the average hours worked per employee to keep pace with increasing demand. Yet worker productivity can be impaired if they are asked to accept too much overtime. Thus as economic growth continues and becomes more assured, firms are more likely to commit to hiring new workers, which can allow hours worked per employee to decline.

Visit additional resources for this topic:

Consumer Price Index (CPI)

Rising wages are not always inflationary. If worker productivity is rising, then more output is produced for a given hour of a worker's time. Thus the firm can afford to raise the worker's pay without having to raise the price of what the worker is making to finance the pay raise.

Visit additional resources for this topic:

Interest Rate Spread

The interest rate spread is a powerful tool for forecasting periods of economic growth and recession. A positive interest rate spread forecasts economic growth in the next year, while a negative interest rate spread forecasts a recession in the next year.

Visit additional resources for this topic:

Labor Cost Per Unit of Output

Changes in unit labor costs reflect the net effect of changes in worker compensation and changes in worker productivity. Thus the economic growth created by gains in labor productivity can be shared with workers without increasing unit labor costs and creating inflationary pressures.

Visit additional resources for this topic:

Labor Productivity

There is a direct and powerful link between productivity and economic growth. Increases in labor productivity mean that more output is produced for a given quantity of labor input. The value of this increase in output is manifested as economic growth. Higher wages paid to more productive workers provides the gain in purchasing power necessary for workers to share in the gain in material prosperity.

Visit additional resources for this topic:

Money Supply (M2)

The supply of money is a determinant of interest rates, and interest rates influence the rate of capital investment, productivity growth rates, and ultimately economic growth and our material standard of living. Most of the productivity gains that our economy has made in the last few years are related to advancements in technology. If borrowing costs are too high, businesses will continue to use old equipment, which will tend to slow the rate of productivity growth.

Visit additional resources for this topic:

Real GDP

Economic growth refers to increases in real GDP. Improvements in productivity represent a key source of future economic growth. This is why countries that have relatively high rates of business investment tend to have faster rates of economic growth.

Visit additional resources for this topic:

Real Per-Capita Disposable Income

Gains in real per-capita income are generated by improvements in productivity. Productivity is in turn linked to business investment. Countries with relatively strong business investment tend to have more rapid gains in real per-capita income.

Visit additional resources for this topic:

 

©2000  South-Western.  All Rights Reserved   webmaster  |   DISCLAIMER