Morning Report: Productivity Declines

Vital Statistics:

  Last Change
S&P futures 4,689 4.2
Oil (WTI) 71.88 -0.18
10 year government bond yield   1.49%
30 year fixed rate mortgage   3.34%

Stocks are flat this morning on no real news. Bonds and MBS are down small.


Nonfarm productivity declined 5.2% in the third quarter as output increased 1.8% and hours worked rose 7.4%. This is the lowest reading since 1960. Nonfarm business productivity fell 0.6%, the biggest decline since 1993. Unit labor costs increased 9.6% as compensation increased 3.9% and productivity fell by 5.2%.

Productivity is the key to non-inflationary growth. It is also the key to higher living standards. This is certainly an issue that will concern the Fed. FWIW, productivity is generally a pretty volatile measure, so one bad reading isn’t the end of the world. But it does comport with supply chain issues, rising wages and slower output increases.


Mortgage applications increased 2% last week as purchases fell 9% and refis increased 5%. The index includes an adjustment for the Thanksgiving holiday. “Mortgage rates declined for the first time in a month, prompting a pickup in refinancing, with government refinances increasing more than 20 percent over the week,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While the 30-year fixed mortgage rate and 15-year fixed mortgage rate both declined only one basis point, the FHA rate fell 7 basis points, driving the surge in government refinances. Borrowers are continuing to act on these opportunities, but if rates trend higher as MBA is forecasting, the window of opportunity to refinance will continue to get smaller.”


Saule Omarova has withdrawn her name from consideration to run the OCC. She was torpedoed due to some pretty out-there writings which advocated for state control of banking. Not the ideal person to regulate banks. I could see Biden tapping ex-CFPB head Richard Cordray to run the agency. He has been mentioned as a possibility for the Fed, but since he is a lawyer and not an economist he would be a better fit at OCC.

15 Responses

  1. Good piece:


    • not a subscriber, but turning it up to 12 probably isn’t going to work.

      their best hope is to keep him out of mainstream social media.

      And the description of the article is one of the most self-unaware things I have ever read.


      • You don’t need to be. Just block Javascript.


        • didn’t know that.

          IMO the trump card can only be played once. too many people were red-pilled by the media’s behavior. the MSM is only preaching to the converted at this point


        • Just block Javascript.

          How do I do that?


        • Depends on the browser. Google “turn off JavaScript” or “turn off scripting” in the name of your browser. In Brave there’s always a little Brave icon in the url or menu bar. On my iPhone I just click the Brave icon and can turn off scripting just for a specific site.

          Lots of sites don’t work without JavaScript so a browser that blocks by site is best.


        • How do I do that?

          Firefox + NoScript

          You can select exactly which sites you will allow to run javascript. It’s also a great safety feature, and shows you what’s going on behind the scenes.

          Hint – is what tracks you.


        • Remind us again what shutting off javascript does? I’m not as tech savvy as i’d like.


        • Javascript is a coding language. It controls a lot of interactive functions on the web sites, but can also be a vector for viruses and other malware if there’s a vulnerability on your computer that hasn’t been patched and you go to a site that’s trying to exploit it.

          I use Firefox and NoScript and have every site disabled by default and then only allow enough scripts to work on sites to get the functions that I want.

          Among other things, this helps to limit the amount of online tracking that I’m subject to.

          The real benefit is if & when you do searches and click on links and accidentally end up on a malicious site, it limits the amount of damage that can be done to you unless you intentionally turn on scripting for that site.


        • Ok, that makes sense. Thanks!


        • Let’s be real. Trump came down the escalator and made the ridiculous racist proclamation that “Mexicans are Rapists.”

          Emblematic. “Let’s be real” followed by a complete misquote.

          and then sponsored a national wave of violent attacks against Asians.

          Good lord, how do you ever even get to the comments?

          And I read a bunch of the comments. You just have a fetish for the mentally ill.


    • Cool. I can turn off scripts by site on Brave—so now I can just go to NYT. I’m Brave, anyway.

      This view, that media “neutrality” has a tacit pro-Trump tilt

      This has implications—that if reporting is objective and honest then Trump would have a really shot at winning. What does that imply? Other than a resentment and condescension towards their audience.

      Biden’s media coverage has lately been as negative, or even more negative, than Trump’s coverage through most of 2020

      This just strikes me as delusional. This is setting up an algorithm to find the result you already imagined. There’s no way coverage of Biden is worse than Trump or even half-as-bad. Not in the MSM. It’s no longer nauseatingly hagiographic and slavishly sycophantic, but “not so fawning it’s just gross” does not constitute outrageously negative press.

      He makes good points but then exhibits similar behavior, saying this:

      a border-crossing crisis that was likewise unanticipated,

      He says of Biden’s troubles, though every Republican warned exactly this would happen. Which makes me think, again, that his heart is in the right place but even from an editorialist that line with no additional content strikes me as incompetence (due to living in the same bubble he’s bitching about).


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