Hombre, what's your take on what the numbers mean for stocks going forard: good[] mixed[] bad[] irelevant[]
Actually, I would choose Door Number 5: "I don't know".
Basically, it looks to me like the 1999 Q3 and Q4 productivity numbers (5% and 6.4%, respectively) were too high, and the current numbers are more indicative of the real trend.
Part of the problem is that it is not really clear what is being measured by worker productivity. The bear argument is that productivity growth only occurs in the computer industry, representing a mere 1% of the economy. According to this argument, the rapid increases in computer-industry productivity skew the overall picture for the economy. Compounding the problem is the issue of how to measure computer-industry productivity. You can't simply say Intel's worker productivity increases at the same rate as Moore's Law; instead, you have to deflate this number by some kind of index. The Bureau of Labor Statistics uses something called a hedonic price index as a divisor. Another choice is the PPI. Depending on which deflator you use, you get a different productivity result.
The upshot is, the high 1999 Q3 and Q4 productivity numbers were overstated by Y2K computer-related skewing, so the latest numbers may be more reflective of actual conditions.
I have a hard time swallowing the bear argument hook, line, and sinker. I mean that I don't believe computer-related productivity growth has no productivity effects on the rest of the economy. But I also feel the statistics are too confusing, and can be manipulated too many different ways according to each interpreter's bias. But I guess history will take care of itself. In the meantime, I expect statisticians to keep moving the goalposts as suits their preference. |
