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Growth and Productivity - SPAM

            The fundamental growth of the United States' material standard of living is the growth of productivity (Field 1). Productivity is defined as a measure of economic efficiency which shows how effectively economic inputs are converted into outputs (U.S. Dept. Labor 2). It is measured by the output per hour of all persons or it is also known as labor productivity (U.S Dept. Labor 2). According to the US Department of Labor's Bureau of Labor Statistics, the "nonfarm business sector labor productivity increased at a 2.3 percent annual rate during the third quarter of 2014 (U.S. Dept. Labor 1). Also, "output increased 4.9 percent and hours worked increased 2.5 percent (U.S Dept. Labor 1). The unit labor costs fell nearly 1.0 percent in the third quarter of 2014, but there was a 1.3 percent increase in hourly compensation (U.S. Dept. Labor 1). All of these numbers indicate the nonfarm business sector was doing well in the third quarter of 2014. .
             The manufacturing sector productivity numbers also increased in the third quarter of 2014. The third quarter results for the manufacturing sector as follows, productivity rose 2.9 percent, output increased 4.2 percent, hours worked increased 1.3 percent (U.S. Dept. Labor 1). There are two parts to the manufacturing sector, the durable goods (i.e. cars, refrigerators, phones, etc.), increased 3.2 percent, and the nondurable goods (i.e. food, clothing, etc.), increased 3.5 percent. The unit labor costs of the manufacturing sector decreased by 1.3 percent for the third quarter of 2014. Between the nonfarm business sector and the manufacturing sector we can see that the economy was doing fairly well in the third quarter of 2014. The change in productivity would impact the demand of the supply curve for a product. When the productivity increases the supply of the product also increases. Also, since the hourly compensation and hours worked increased a person's income increased as well.

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