GDP Sector Growth is as follows:

- Inventories 94 hundredths of 1% (Cash for Clunkers inventory build)

- Residential Construction: 53 hundredths of 1%

- Federal Spending: 62 hundredth of 1% (Unemployment Programs, etc)

- Motor Vehicles: 1.01% (Cash for Clunkers)

- Miscellaneous: 4 tenths of 1%

What might have been a contraction in the 3rd quarter was reversed by Cash for Clunkers (mostly) and the ARRA. <link> Angry Bear Blog, hat tip to DOLB and kharris. Looks like GDP growth was all government. Anyone still looking to raise Fed Rates?

Long Term Unemployment as shown here: <link> Economists View is at the highest level since WWII with slightly < 2.5% of the population experiencing unemployment >27 weeks

Spencer's Argument on Labor Share:

A far better statistician than I and also an accomplished economist, Spencer at Angry Bear <link> makes a well reasoned argument that Labor has not seen its fair share of productivity increases for the last 20-30 years.

Pre-1973, productivity growth averaged 2.8%. From 1974 to 1995, productivity growth slowed to 1.5% before returning to 2.4% after 1995. Real GDP followed a similar pattern, falling from 68% (ratio prod to real GDP) in the strong productivity era to 50% in the weaker part and returning to 80% after 1995. Real GDP growth equals productivity growth plus hours worked or employment growth. In 2009, a 1% increase in real GDP results in a 2 tenths of 1% increase in hours worked versus 3 tenths of 1% in pre-1974 and a 5 tenths of 1% in the 1974 to 1995 period. <link>

Examining non-farm Productivity versus Output gives a clearer picture. In the 1990s and early 2000 recoveries, productivity growth outpaced Output growth resulting in drops in hours worked, decreased employment or what were called jobless recoveries. <link> It appears the real issue is weaker growth rather than productivity improvements. The result of this change since 1982, labor has experienced a decreasing portion <link> of the productivity gains. The graph represents labor payments as a portion of the total nonfarm business output as reflected in 1992 $.

So what happened to business after tax profits? <link>

Old Topic New Chart; 2001/2003 10 year Impact on Taxpayers

Not much has changed here. ~25% of the 2001/2003 tax breaks were skewed toward 1% of the taxpayers, ~ 1 million taxpayers, in the amount of ~$550 billion. Note also where the $200,000 salary tax breaks were. <link>