If this is true, it's bad news for supply side advocates:
Downward productivity revision coming, by Michael Mandel, Economics Unbound: Tomorrow's numbers from the BLS are likely to show a sharp downward revision in productivity growth for 2004 and 2005. Instead of an average productivity gain of 3.0% for those two years, the new pace is likely to be closer to 2.5% or 2.6% (this is based on looking at the revisions in the latest GDP release).
This raises the worrisome possibility that the productivity boom may not have been as strong as we thought.
As Marty Feldstein notes in similar comments about the most recent GDP data release, this will also affect unit labor cost estimates. We'll know tomorrow, as will the Fed as it decides whether to pause or increase the federal funds rate by another quarter point.