Productivity decrease signals more inflation trouble

ALG warns record productivity decrease combined with higher costs of labor is a dangerous mix.

May 6, 2022, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement regarding the sharp decline in United States productivity in the first quarter of 2022:

“The Bureau of labor announced that productivity in the United States declined by 7.5 percent in the first quarter of 2022. This is a flashing red danger sign that more inflation is looming. The drop in productivity is the largest recorded since 1947. In simple terms, this means that the labor costs associated with producing products in America is skyrocketing. This is particularly concerning due to the fact that increasing wages are not included in the productivity calculation.”

“The combination of record decrease in productivity along with the higher cost of labor is a witch’s brew signaling increased inflationary pressures in the months ahead.”

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