Wages are supposed to track worker productivity, and from the end of World War II until 1973 they did. Then, something happened: Productivity kept rising but wages did not. Many on the left argue the link is now broken and redistributing income from the wealthy downward would help workers more than faster economic growth. But a new study co-authored by Harvard University economist Lawrence Summers says that’s wrong. He and Anna Stansbury, a doctoral student at Harvard, found a strong and persistent link between hourly productivity and a variety of wage measures since 1973. The problem, they conclude, is that the positive influence of productivity on pay has been overwhelmed by other forces pushing the other way.
U.S. employers hired at a strong pace in October, and revisions showed the labor market weathered hurricane damage better than previously estimated.\Nonfarm payrolls rose a seasonally adjusted 261,000 in October, a pickup from the prior month, the Labor Department said. The unemployment rate declined to 4.1%, its lowest level since December 2000. Economists expected 315,000 new jobs and a 4.2% unemployment rate last month. Wages rose 2.4% from a year earlier, a slowdown from last month.September's payrolls data, initially reported as the first drop in seven years, were revised to show employers actually created 18,000 new jobs that month, extending the economy's streak of job gains to a record 85 straight months.
U.S. workers boosted output per hour this summer at the best rate in three years, a sign that long sluggish productivity gains might finally be breaking out. Nonfarm business-sector productivity increased at a 3.0% seasonally adjusted annual rate in the third quarter, the Labor Department said Thursday. The gain was better than economists had expected and the largest quarterly improvement since the third quarter of 2014. Productivity is on pace to grow this year at the best pace since 2010, when the economy was first emerging from a deep recession. That’s an improvement from near zero much of 2015 and 2016.
The U.S. economy grew robustly in the third quarter despite two hurricanes, propelled by steady spending from American businesses and households.
Gross domestic product, the broadest measure of goods and services made in the U.S., expanded at a 3% annual rate in July through September, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal had projected a 2.7% gain.
Output expanded at 3.1% rate in the second quarter. This marks the economy's best six-month stretch since mid-2014.
Electric-car maker Tesla has reached an agreement to set up its own manufacturing facility in Shanghai, according to people briefed on the plan, a move that could help it gain traction in China's fast-growing market for electric vehicles.
The deal with Shanghai's government will allow the Silicon Valley auto maker to build a wholly owned factory in the city's free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China's 25% import tariff.