"Jobless Rate Hits 30-Year Low, 3.9%"
John M. Berry
Washington Post, May 6, 2000, page A1
"The Jobless Rate Declines to 3.9%; Lowest Since 1970"
Louis Uchitelle New York Times, May 6, 2000, page A1
These articles report on the Labor Department's release of employment data for the month of April. This data showed the
unemployment rate falling to its lowest level in more than 30 years. Both articles include references to the economy's recent strong rate of productivity growth.
It is worth noting that the measure of hours worked in the first quarter was revised upward in this report. This raised the rate of growth of hours worked from the fourth quarter of 1999 to the first quarter of 2000 by approximately 0.3 percentage points. This increase in the rate of growth of hours worked lowers the rate of productivity growth by approximately the same amount. If there are no other changes to the data, this implies that productivity growth for the first quarter will be revised downward by approximately 0.3 percentage points, to 2.1 percent.
While quarterly productivity numbers are extremely erratic, and this is still a respectable rate of productivity growth, it is well below what many actors in financial markets have come to expect. Proponents of "new economy" theories may be surprised by a downward revision of this magnitude.
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