Economic analysis can get weedy…. so a simple way to look at productivity is to think about baking bread in your kitchen.

If you were going to bake 4 loaves of bread it might take you 2 hrs start to finish. However, if you were going to bake 8 loaves of bread it would not take you twice as long because most of the tasks can be accomplished with simple increases in batch size, and only minor increases in labor time.  Your productivity measured in the last four loaves is higher.

Economic Productivity is measured much the same way, within what’s called a production probability equation.  Additionally, if two hours of your time are worth $40, each of four loaves of bread costs $10; but if you make 8 loaves in the same amount of time the labor cost is only $5/per loaf.

From 2007 through 2017 the average rate of productivity increase was 1.3%.  However, in the second quarter of 2018 productivity jumped to 2.9%.  That means total business output increased significantly as more product was demanded from within the business operation.  Throughout the economy people just wanted more stuff.

Improved gains in efficiency/productivity (more bread needed) supports faster economic growth without generating higher inflation; no need to raise prices because your cost to make each loaf of bread decreases the more you make.  Higher sales and lower per unit cost means more profit for the bread-maker.  No need to raise prices.  Without inflation, there’s no motive for the Fed to raise interest-rates.

Increases in productivity generally means the economy is generating more stuff.  The more stuff generated the higher the value of all economic activity; this increases GDP growth.

When we see higher productivity in direct alignment with GDP increases, the increased production indicates sustainable GDP growth.

BLS Report: “Nonfarm business sector labor productivity increased 2.9 percent during the second quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 4.8 percent and hours worked increased 1.9 percent.” (link)

We made 4.8 percent more stuff, and only worked 1.9 percent longer.  The net is a 2.9 percent productivity increase.

.

The future’s so bright…

…he’s gotta wear shades!

Departing the White House for New York and New Jersey, President Trump delivers impromptu remarks and holds a brief unscheduled presser prior to climbing aboard Marine-One.

Earlier today Secretary of State Mike Pompeo introduced the newest geopolitical strategy from the U.S. Department of State, the Iran Action Group.  The goal of the coordinated effort is to assemble a unified action front from all allies toward the destabilizing activity stemming from within the Iranian regime.

.

[Transcript] SECRETARY POMPEO: Good afternoon, everyone. Today I am happy to announce the creation of the Iran Action Group.

The Iran Action Group will be responsible for directing, reviewing, and coordinating all aspects of the State Department’s Iran-related activity, and it will report directly to me.

For nearly 40 years, the regime in Tehran has been responsible for a torrent of violent and destabilizing behavior against the United States, our allies, our partners, and indeed the Iranian people themselves. In May of this year, President Trump withdrew from the flawed Iran nuclear deal, which failed to restrain Iran’s nuclear progress or its campaigns of violence abroad. In its place President Trump has instituted a campaign of pressure, deterrence, and solidarity with the long-suffering Iranian people.

Our hope is that one day soon we can reach a new agreement with Iran. But we must see major changes in the regime’s behavior both inside and outside of its borders. The Iranian people and the world are demanding that Iran finally act like a normal nation.

The Iran Action Group will drive daily progress on these objectives and I hope do much more.

We are committed to a whole-of-government effort to change the Iranian regime’s behavior, and the Iran Action Group will ensure that the Department of State remains closely synchronized with our interagency partners. The IAG will also lead the way in growing efforts with nations which share our understanding of the Iranian threat. President Trump is making our Iran strategy a true multinational undertaking, and the Iran Action Group will be key to further progress in that regard.

I am also announcing that Brian Hook will lead the Iran Action Group with the formal title of Special Representative for Iran. Brian has served as the Director of Policy Planning here since February of 2017, and he has worked tirelessly to advance President Trump’s foreign policy priorities across multiple domains. Brian’s diplomatic expertise and broad experience with Iran policy makes him an outstanding choice to lead the State Department’s Iran Action Group.

Since the President’s decision to withdraw from the Iran deal in May, Brian has played an important role in shaping our strategy of maximum diplomatic and economic pressure.

We are going to continue to rely on him and his team to lead our efforts to counter the Iranian regime’s malign activity, to support Iranian voices, and to galvanize international support for our efforts.

And with that, I’d like to introduce our new Special Representative for Iran, Brian Hook.

When we elected a successful businessman as President of the United States and leader of the executive branch, we elected a person who fundamentally changed the framework of accountability and transparency in government. President Donald J Trump holds an average of two to three full cabinet meetings each month where the cabinet members give direct updates on execution of policy priorities.

No President in modern history has put that much accountability into the position of each cabinet member. No President has ever coordinated strategic objectives with such a high level of expectation and scrutiny. No President has folded transparency into the cabinet with full media access over White House cabinet meetings. This is a new executive branch standard.

NEC Director Larry Kudlow break-out discussion on the economy at 03:45. WATCH:

National Economic Council Director Larry Kudlow appears on Fox News to discuss the incredible strength of the economy and how the media is refusing to cover the story.

Chairman Kudlow goes through a series of economic Key Performance Indicators (KPI’s) to stress how this specific set of MAGAnomic Main Street policies is delivering real, tangible, financial benefits to the middle-class and average Americans.