The June jobs numbers came in somewhat better than expected largely due to the government adding 40,000 jobs. The health care sector accounted for 42,300 of the 92,000 jobs created by the private sector. Over the last three months the health care sector has accounted for 131,000 of the 345,000 jobs created by the private sector or 38 percent.
The better than expected job growth implies another quarter of weak productivity growth. With hours growing at a 2.3 percent annual rate, productivity for the quarter will be approximately 1.0 percent if GDP comes in near the consensus forecast. That means that we will have had three full years with average productivity growth of less than 1.5 percent. This has to raise serious questions about whether the post-1995 productivity upturn has come to an end.
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