US Productivity rose a disappointing 3.1% in Q3 (missing expectations of a 3.3% rise). However, on a year-over-year basis, Q3 saw a second consecutive decline – the first two-quarter decline in US productivity since 1993. Unit labor cost growth slowed in Q3 to 3.00% (with QoQ growth tumbling from 6.2% in Q2 to just 0.7% in Q3).

Actually if one looks at the official table US productivity has not risen YoY since Q4 2015 – (Q1 0.0%, Q2 -0.3%, Q3 -0.05%)

But, as Fed-induced investment in buybacks crowds out capex, real-worker productivity is collapsing (but buy back productivity is soaring).

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How can this be?? The mainstream media ‘economists’ are stunned. As we explained previously, there are a few reasons… Even Alan Greenspan has warned that America is “in trouble basically because productivity is dead in the water…” There are numerous reasons for this plunge in worker-productivity, from perverted incentives not to work to unintended consequences of monetary policy enabling zombies, but perhaps the most critical driver is exposed in the following dismal chart…

51% of total time spent on the Internet is on mobile devices – in 2015, first time ever mobile is #1 – to make a total of 5.6 hours per day snapchatting, face-booking, and selfying…

Source: @kpcb

So, while every effort can be made by Ivory Tower academics to solve the problem of American worker productivity, perhaps it can be summed up simply as “Put The Smart-Phone Down!”

As we detailed previously, adjusting for the WWII anomaly (which tells us that GDP is not a good measure of a country’s prosperity) US productivity growth peaked in 1972 – incidentally the year after Nixon took the US off gold.

The productivity decline witnessed ever since is unprecedented. Despite the short lived boom of the 1990s US productivity growth only average 1.2 per cent from 1975 up to today. If we isolate the last 15 years US productivity growth is on par with what an agrarian slave economy was able to achieve 200 years ago.