But there may be another, less benign, reason for rising productivity. In past downturns, educated professionals have escaped mainly unscathed. This time businesses are relentlessly hacking at their professional workforce—a tactic that boosts short-term productivity while hurting long-term growth. Rising productivity may be a sign of weakness, not strength.
Over the past year the number of employed professionals has fallen by 0.7%, a rare decline. Outside of the still-growing education and health-care occupations, the number of employed professionals has dropped by a dramatic 3.6%.
Cutting productive staff for short term rewards is definitely a negative for long term productivity. My guess is the management ranks are not as productive as the non-management ranks are however. My sense is their is more room to eliminate non-value added activity from management positions which will not harm long term productivity growth.
A good way to improve productivity is to reduce excessive pay for senior executives. As the money wasted on exorbitant pay that senior executives lavish on themselves is reduced the capital wasted on them can be better deployed in ways that will improve productivity.
I hope that funding does come through. Accurate economic data is important to judge the state of the economy.