Todays numbers are being taken as a green shoot. Not sure I understand that.
The simple fact is that productivity went up (people were worked better (most people say 'harder', I'd say thats not all of it)), while unit labor costs went down sharply (which means people are being paid less, per unit produced, plain and simple) and hours fell.
This sounds like a bad thing for consumers, no?? Especially the masses that live at the edge. That's really bad, right?
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Good to see you back. I've been talking to myself on this board lately.
The US corporate business model cheered on by Wall Street the past 10 years is to employ no one through globalization, pay them nothing and lever up the public and private balance sheets away from the corporations. This leverage allows demand (revenue) to remain strong with low expenses - the results are then labled as "productivity."
This is how Wall Street cheers the death of American capitaism for short-term gains.
We know this market is really run by Fibionnaci numbers rather than anything fundamental.
To answer your question, it's only bad when:
1). Their are defaults on the debt. The US has indicated it will force the country to default before any big bank or bondholder has to take a hit.
2). Interest costs on the bdet rise - that won't happen as the Fed has created a constant deflationary cycle
3). Taxes are raised to actually pay off the debt. The Republicans are under the trance of the false god known as Reagan where the model was to take on massive debt and cut taxes so the next generation would deal with it.
Hey Aditya
Thanks for the insight on this. Sadly, I think you're right - we keep robbing Peter to pay Paul.
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