The Economy Today: Productivity Up; Will Jobs Follow?

A roundup of national and regional economic headlines

The Washington Post carries an AP story this morning reporting that productivity rose by an annual rate of more than 6 percent during the second quarter, while labor costs plummeted. As the story notes, productivity, or output per hour of labor, is often “a key ingredient for rising living standards,” but in recent months companies have been using the output gains to cut costs and bolster their bottom lines. A related Wall Street Journal story offers further explanation. “The net result” of businesses squeezing more work out of fewer employees, the Journal writes, is “rising unemployment, stagnant wages, sagging consumer confidence — and better-than-expected corporate profits.”

A pair of New York Times stories, meanwhile, points to one spot where the job market is improving: Asia. While the situation remains fragile, the latest economic data from Singapore, the Philippines, Australia and China contain hopeful signs, according to one article. That has to come as welcome news to the growing number of American college grads, even those who don’t speak Mandarin, who are heading to China.

On the stimulus front, the AP relays word that an inspector general is scrutinizing the designation of federal funds for airport projects that don’t meet the FAA’s threshold. Two of the projects drawing a closer look are, no surprise, located in tiny Alaskan outposts.

In Florida, meanwhile, the local papers have picked up on word that a Congressional committee has criticized the state for its lackluster pace in spending its share of transportation stimulus funds. The St. Petersburg Times reports that the topic has become an issue on the state’s 2010 U.S. Senate race. Gov. Charlie Crist, the presumptive Republican nominee for the Senate seat, has pushed back against the criticism, saying it is based on outdated data. Out in California, meanwhile, the San Francisco Chronicle urges its home state to get its act together and apply for stimulus funds.

Finally, local papers in two states carry education-related stimulus stories. The Arkansas News reports that universities in its state will receive more than $42 million in federal funds to be used for renovation, energy-efficiency improvements and expansions. In Michigan, meanwhile, the Detroit Free Press takes note of an unanticipated consequence of stimulus support. A boost in federal aid will allow local school districts to reduce the amount they budget for special education this year. But parents of special-education students are worried that when the federal money disappears, the districts won’t be able to pick up the slack again.

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Greg Marx is an associate editor at CJR. Follow him on Twitter @gregamarx.