Last week the government released two important economic figures, one good and one bad. Firstly the good: Productivity in Q3 2009 saw a 9.5% gain, its largest quarterly increase since 2003. If combined with Q2’s 6.9% increase, it leads to the largest six month productivity gain since 1961. And the bad news: unemployment as a total of the workforce rose above the psychologically important 10% level for the first time since 1983, clocking in at a larger than expected 10.2%.
In the last few days comments on both figures have been a dime a dozen, but speaking from our directional focus, what effect can we expect to see in the energy markets?
Firstly, we accept that with such all-encompassing figures there is an inherent lag between relationships. Thus, the high productivity figure in Q3 may not say much for unemployment rates in Q3, but once workers reach the upper limits of productivity, more workers are slowly hired under the assumption that there’s a lot of work needing to be done.