Anyone care to elaborate:
Worker productivity dropped this spring for the first time in more than a year, a sign that companies may need to step up hiring if they hope to grow.
Productivity declined at an annual rate of 0.9 percent in the April-to-June quarter after posting large gains throughout 2009, the Labor Department said Tuesday. Unit labor costs edged up 0.2 percent in the second quarter, the first increase since the spring of 2009.
Output of U.S. workers is the key ingredient to boosting living standards. It allows companies to pay workers more because of the increased production without being forced to raise the cost of their goods, which sparks inflation.
In most cases a slip in productivity would be a troubling sign for the economy. But some analysts believe a short-term drop is needed to boost the recovery. That’s because it could be a signal that employers can no longer squeeze extra output out of leaner staffs.
“This could be a turning point as far as hiring goes,” said Joel Naroff, president of Naroff Economic Advisors
An uptick in hiring would be nice.