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During the first quarter, nonfarm productivity fell 2.5% in the US, according to data presented Thursday. Analysts at Wells Fargo warn that the coronavirus crisis poses a major risk to the productive capacity of the economy. 

Key Quotes: 

“Output fell (-6.2%) more than hours worked (-3.8%). Both output and hours worked declined at the fastest rate since 2009.”

“Massive job losses since the end of March may mechanically boost productivity growth figures in the near-term. This is typical of recessions, but the focus should be on how productivity performs after the current crisis.”

“The slashing of business investment plans in the wake of COVID-19 is a major risk to the long-term productive capacity of the economy.”