November 7, 2019
Reports from the Commerce Dept. and the Labor Dept. this week show productivity fell among American workers during the July to September period, and the U.S. trade deficit fell in September to its lowest level in five months.
The Labor Department reported productivity dropped 0.3% in Q3 2019, following two quarters of healthy gains. Productivity increased just 1.4% over the past year, a number that is roughly two-thirds of what it has averaged over the long-run. Reasons cited for the sluggish productivity growth include a view by some that new technologies, such as smartphones and mobile software, aren’t as impactful from an economic perspective, and technologies, such as search engines, are not captured in government data reporting.
On the trade front, the U.S. trade deficit fell in September, as imports dropped more sharply than exports, and the U.S. experienced a rare petroleum surplus. The Commerce Department reported that the September gap narrowed by 4.7% to $52.5 billion, the smallest imbalance since April. The deficit stood at $55 billion in August. The trade deficit with China dipped 0.6% to $31.6 billion. The September numbers show that exports fell 0.9% to $206 billion, and imports fell at an even faster clip of 1.7% to $258.4 billion.
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