The first quarter productivity number showed a strong increase of 5.4% up from shrinking 3.8% in the fourth quarter of last year. Productivity is important as it goes to the standard of living of all Americans. As we become more productive our earnings will be able to buy more products and services with the same amount of dollars. At least that is the theory.
You would expect salaries to increase as workers become more productive but that has not been the case. That may change in the coming months as the economy heats up again. We are seeing inflationary pressured entering the system and that should hold true with salaries as well.