Productivity Drops, Jobless Claims Remain Elevated

from Wall St Journal:
Stock futures are rallying for some strange reason, though the morning’s plate of economic data was sort of ugly.
Jobless claims came in at 409,000, just a little higher than the 407,000 economists expected. The prior week’s claims were revised up, as they always are, to 421,000 from 417,000. This level of claims is really too high.
Second quarter productivity was revised down to a decline of 0.7%, the biggest drop since the fourth quarter of 2008, from a first reading of -0.3%. It has fallen for three quarters in a row, for the first time since 1979.

from Yahoo Finance:

WASHINGTON (AP) — Worker productivity in the United States fell this spring more quickly than previously estimated while labor costs were rising at a faster clip. Both developments could pose threats to a fragile economic recovery.
The U.S. Labor Department reported Thursday that productivity declined at an annual rate of 0.7 percent in the April-June period, a bigger drop than the 0.3 percent decline reported a month ago. Labor costs rose at an annual rate of 3.3 percent, faster than the 2.4 percent increase originally reported.
The changes reflected downward revisions made last week to overall economic growth which showed the economy's output barely growing in the spring. Declining productivity, if it persists for a prolonged period, would represent a serious economic threat while rising labor costs would cut into corporate profits.

Data? What Data?

Apparently, G7 finance ministers have had enough of tumbling stock markets. Despite continues abysmal data, they began aggressively intervening into the financial markets last night, determined to prop up the sagging stock markets.  After all, news is so, well, passe! We have printed prosperity now!

from Zero Hedge:

The only economic data point of the day is a disappointment as non-farm productivity drops 0.3% on consensus of -0.9%, although we once again get an unprecedented revision from the BLS whose data can no longer be trusted for anything, as Q1 productivity was cut by whopping 2.4% from 1.8% to -0.6%! This is the first consecutive quarterly drop since 3Q, 4Q 2008. Net, this is very disappointing data and means that the economic slow down is far more broad than previously expected. And, not at all surprisingly, we get the same thing with labor costs rising 2.2% on consensus of 2.4%. The kicker yet again is in the revision, which speaks for itself: from 4.8% to 0.7% in Q1. US economic reporting is rapidly becoming a bigger joke than the Chinese Department of Truth.

Productivity Slows

WASHINGTON (MarketWatch) -- With major cost-cutting efforts now in the past, the productivity of U.S. nonfarm businesses slowed in the first quarter from 6.3% to a still-healthy 3.6% annual rate, the Labor Department estimated Thursday.

Even with the slowdown in the first quarter, productivity has risen 6.3% over the past four quarters, the fastest growth in 48 years and nearly three times its average growth rate.
In the first quarter, output increased 4.4% on an annualized basis, while hours worked rose 0.8%, the government estimated.