JPMorgan Econ FI-US Post-pandemic productivity improves--此为英文文档

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MichaelFeroli(1-212)834-5523

michael.e.feroli@

JPMorganChaseBankNA

NorthAmericaEconomicResearch

GlobalDataWatch

09August2023

US:Post-pandemic

productivityimproves

•Massivedistortionsbroughtonbythepandemichavecloudedthepictureonrecentlaborproductivitytrends

•However,throughthenoiseitlookslikeproductivityisgrowingnoworsethaninthelastcycle

•Somerecentdevelopmentsofferglimmersofhopethattrendproductivityispickingup

•Measurementissuessuggesttherecentinflationcyclemayhavebeganearlierthantheofficialdataindicate

Laborproductivityinthenonfarmbusinesssectorjumpedata3.7%annualratelastquarter.IftheearlytrackingofGDPgrowthin3Q(JPM:2.5%,AtlantaFed:3.9%)isanywhereclosetocorrect,thenproductivitygrowthwilllikelybestrongagaininthecurrentquarter.Recentproductivitygrowthcan-notbeseeninisolationfromtheslumpinproductivityin’22.Andthatslumphadalottodowiththesurgeinproductivityduringthepandemic.Inthisnotewetrytopeerthroughthefogbroughtonbythepandemic.Weconcludethattherecentpickupinproductivitygrowthmaybeagenuinedevelop-ment,andnotanechoeffectofthepandemic.Moreover,wediscusssomereasonsthatthepick-upcouldhavesomelegs.

Whenthehurly-burly’sdone

Lastquarter’sreboundinproductivitygrowthliftedtheyear-agogrowthrateto1.3%-thefirsttimethatmetrichasbeeninpositiveterritorysincelate’21(Figure1).

Figure1:Nonfarmproductivitygrowth

%ch

15

q/q,saar

Overyear-ago

10

5

0

-5

0005101520

Source:BLS

Asalludedtoabove,it’shardtotakethealternatingperiodsofstrengthandweaknessinthiscycleinisolation.Inparticu-lar,the17.3%annualizedproductivitygrowthin2Q20—themostinaquartersince1947—castalongshadowoversubse-quentproductivityperformance.Figure2presentsBLS’annualcalculationofthesourcesofproductivitygrowth,whichisavailablethrough’22.

Figure2:Sourcesofproductivitygrowth

%

change,nonfarmbusinesssector

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Multifactorproductivity

Labor

composition

Capitalintensity

-2

131517192123

Source:BLS

Inthisdecompositiontherearethreewaysthatoutputperhourworkedcanincrease.First,thehourofworksuppliedmaycomefromamoreskilledoreducatedindividual,calledthelaborcompositioneffect.Second,eachpersonworkingcanhavemoreorbettercapitalequipmenttoworkwith,calledherecapitalintensity.Finally,everythingelsethatisn’texplainedbythesefirsttwoiscalledmultifactorproductivity,anditmayhaveastrongcyclicalcomponent.

Asiswellknown,duringthepandemicthefirstpeopletogetlaidoff,ortooptoutofworking,tendedtobelower-skilled.Theresultingworkforcewasessentiallyanarmyofofficers.Thistilttowardamoreproductiveworkforceledtoarecord1.7%-pointcontributionoflaborcompositiontoproductivitygrowthin2020.Usuallycapitalservicesperhourcontributestoproductivitythroughthenumerator—ongoinggrowthininvestmentandthecapitalstock.However,in2020thatcon-tributioncamemorethroughdeclinesinthedenominatorratherthanincreasesinthenumerator.

Astheeconomy(andstaffing)normalizedin’21and’22,bothoftheseunusualcontributionstoproductivitygrowthswitchedsigns,andlaborcompositionandcapitalservicesperhourweredrags.(Theexceptionalstrengthinmultifactorproductivityin’21waslikelyaresultofutilizationratesnor-malizing,atleastaccordingtotheSanFranciscoFed’smea-sure).So,insummary,it’shardtodisentangletheproductivi-tydevelopmentsin’21and’22fromwhathappenedin’20.

Arethemorerecentfiguresstilldwellingintheshadowsofthepandemic?Muchlessso.Whiletherearestillpocketsofpent-upstaffingneeds(notablyinhealthcare)thisseemstohavemostlyplayeditselfout.Thisisalsoevidencedbytheaverageworkweek,whichwaselevatedwhenfirmscouldnotfindenoughworkers,buthasrecentlyreturnedtopre-pan-demiclevels.Moreover,theSanFranciscoFedfiguressug-gestthatthetrenddragfromlaborcompositionhasfaded.

Soitwouldseemthatthefirst-halffigures,whenproductivityincreasedata1.3%rate,isarelativelycleanread.It’salsoveryclosetothe1.4%averageannualizedpacethatprevailed

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MichaelFeroli(1-212)834-5523

michael.e.feroli@

JPMorganChaseBankNA

NorthAmericaEconomicResearch

US:Post-pandemicproductivity

improves

09August2023

between4Q19and2Q23.Whilenotgreat,thesefiguresareabovethe1.0%averageannualizedpacethatprevailedinthepriordecade.

Lookingahead,whatarethenear-andmedium-termpros-pectsforproductivitygrowth?Whilewerecentlyremovedourforecastforarecession,wecontinuetosee’24asayearofsub-pargrowth,withstill-elevatedrecessionrisks.Histori-callythiswouldbebearishforproductivity,asproductivitytendedtobepro-cyclical.However,latelyproductivitygrowthhasbeena-cyclicalorevencounter-cyclical(Figure3).

Figure3:Correlationbetweenproductivitygrowthandoutputgrowth

10-yearrollingwindow,year-agogrowthinnonfarmbusinesssector

1.00

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

5863687378838893980308131823

Source:BLS,J.P.Morgan

Lookingbeyondthenextfewquarters,thestorycouldfollowseveraldifferentplotlines.Oneencouragingpossibilityisthescopeforartificialintelligencetosupplementtheproductivityofknowledgeworkers.

TheinvestmentprerequisitefortheITboomofthe‘90swasbusinessinvestmentininformationprocessingequipment.InanyprospectiveAIboomtheinvestmentprerequisitewilllikelybeinvestmentinsoftware.Sofar,theprospectsinthiscyclelookpromising(Figure4).

Figure4:Realsoftwareinvestment

Index,100=cyclepeak

Pandemic-era

GFC-era

t+0t+4t+8t+12

Source:BEAJ.P.Morgan

Moregenerally,privateinvestmentinintellectualpropertyhasnotsufferedthehangoversthatoccurredaftereachofthepriortworecessions(Figure5).

Figure5:Privateinvestmentinintellectualproperty

%ofGDP

R&D

3.0

2.5

2.0

1.5

Software

1.0

0005101520

Source:J.P.Morgan

Productivityforecastsaresubjecttomorethantheusualuncertaintythatpertainstoeconomicforecasts.However,ifwearetoseeanAI-drivenresurgenceinproductivity,thebusinesssectorisalreadydoingitspart.

Awordaboutprices

Indiscussionsaboutproductivity,thetopicoftheaccuracyofpricesoftencomesup.Pricemeasuresshouldcomparelike-to-like.Soifthequalityofnewproductsisn’tadequatelycap-tured,theninflationisoverstated,and,hence,productivitygrowthisunderstated.

However,thatargumentcangotheotherway.Forexample,someindustryreportsindicatecustomersatisfactionwithres-taurantperformancedeterioratedsharplyinthewakeofthepandemic.Ifindeedservicehasdeteriorated,thenthequality-adjustedpriceofrestaurantmealsshouldgoupmorethancurrentlyreported(BLSdoesnothedonicallyadjustpricesforrestaurantsandotherfoodawayfromhome).Theincreaseinrevenueproductivity(arelatedconcepttoaveragelaborpro-ductivityoftenusedbyresearchersattheindustrylevel)willthenbeoverstated(Figure6).

Figure6:Realrevenueproductivity,foodservices&drinkingplaces

Monthlysalesperworker,2012$

Avg.'21-

Avg.'92-'19

6.0

5.5

5.0

4.5

4.0

3.5

92970207121722

Source:BLS,BEA,J.P.Morgan

Somethingsimilarmayhaveaffectedotherserviceprices.Finally,betterservicepricemeasuresin’21mayhavegivenFedofficialsanearlierheads-upthatsomethingwasgoingonwithinflation.

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MichaelFeroli(1-212)834-5523

michael.e.feroli@

JPMorganChaseBankNA

NorthAmericaEconomicResearch

GlobalDataWatch

09August2023

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MichaelFeroli(1-212)834-5523

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JPMorganChaseBankNA

NorthAmericaEconomicResearch

US:Post-pandemicproductivity

improves

09August2023

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MichaelFeroli(1-212)834-5523

michael.e.feroli@

JPMorganChaseBankNA

NorthAmericaEconomicResearch

GlobalDataWatch

09August2023

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