Saturday, 29 January 2011

Be wary about the figures

During an economic downturn, companies naturally trim payrolls. When recovery comes, output tends to rise more quickly than employment and productivity growth looks healthy. Over a period of something like 6 months, employment rsies ... and productivity growth figures go back to their 'normal' levels.

So, when you see good productivity growth figures - globally - wait ... and look again in a few months. You will get a more realistic aseessment of what has been happening. The recovery has been notable ... but will start to look worse (especially in advanced economies) as employment catches up.

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