Paul Krugman: 'Quiet Quitting' Is 'Biting The Dust' As Non-Farm Productivity Growth Accelerates To 3-Year High

Noted economist and Nobel laureate Paul Krugman on Thursday took stock of one specific data point to illustrate economic momentum.

What Happened: Preliminary second-quarter productivity report released by the Bureau of Labor Statistics Thursday showed a 3.7% quarter-over-quarter increase in non-farm productivity. This marked the fastest pace of increase since the third quarter of 2020 and compares to a revised 1.2% decline in the first quarter.

The increase came about as output increased by 2.4% even as hours worked fell by 1.3%.

Krugman shared a chart showing the improvement in the metric and said, “The post-pandemic productivity slowdown (which may or may not have been real) is over.”

Unit labor costs are now consistent with the disinflation story, he added.

Second-quarter preliminary estimates showed unit labor cost rising 1.6% quarter-over-quarter and 2.4% year-over-year.

See Also: Paul Krugman Hints At Disinflation Era Kicking In: ‘It Just Got Even Harder To Be An Inflation Pessimist’

“‘Quiet quitting’ is (quietly) biting the dust,” Krugman said.

Quiet quitting refers to a recent trend seen in the workplace where employees do the minimum requirements that are demanded of them and put in no additional time or effort.

A Gallup poll conducted in Sept. 2022 found that at least half of the U.S. workforce is quiet quitting, with the trend found more prevalent among young workers.

With the second-quarter data supporting a more engaged workforce, it is likely the trend is reversing.

Why It's Important: Despite the multiple risks, the economy has been alive and kicking, going by a slew of recent economic indicators.

The advance GDP estimate released in July showed that the economy grew at a fairly strong clip of 2.4%. Pricing pressure has eased, with consumer price inflation slowing notably since the highs seen last summer.

Krugman recently said in a New York Times op-ed that Bidenomics — a term used to refer to President Joe Biden's economic policy — is working.

“It would be too much to argue that Biden’s economic policy was pure Goldilocks, that they set the economic temperature just right,” he said.

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