If It's Thursday...

New jobless claims down 5K to 457K, continuing claims up slightly to 5.47 million.  The real news is that Americans continue to work harder for less pay:

U.S. non-farm productivity was slightly less robust than previously thought in the third quarter as workers earned more money and output rose at a slower pace, government data showed on Thursday.

The Labor Department said non-farm productivity rose at an 8.1 percent annual rate, still the quickest pace since the third quarter of 2003, rather than the 9.5 percent rate predicted last month.

Productivity, which measures hourly output per worker, grew at a 6.9 percent pace in the April-June period. Analysts polled by Reuters had forecast growth in third quarter productivity being revised down to 8.5 percent.

Total non-farm output in the third quarter grew at a 2.9 percent pace, rather than 4 percent, the department said. Output dropped at a 1.1 percent rate in the previous period.

Aggressive cost cutting by businesses has pushed productivity sharply higher over the past months. That, combined with a surge in profits during the quarter, has convinced analysts that companies may start hiring and help the economy's recovery.

Why, after squeezing out record productivity gains, would you hire more people?  Why would you expand in an economy like this knowing your competition will be cutting costs?  Why would you hire more people knowing that you're not paying the people you have enough to keep them loyal?  Why not just cut more benefits and expect workers to work harder when there's a real unemployment rate approaching 18%?  You're in an employer's market.  What are your employees going to do, quit and get a job when there's a record six applicants out there for every position?

You can't expand without increased demand.  And the American consumer is far past being tapped out to pay for stuff.  There's no point in hiring more people if there's no increase in demand, that's basic economics.  It would be a good corporate citizen thing to do, but then again cutting wages, hours and benefits by record amounts doesn't exactly make me think there's going to be much of that generosity going around when it's all about profit profit profit.

What recovery?  This nasty little death spiral is a neat trap, is it not?  Lower wages means lower demand.  Lower demand means more cost-cutting.  More cost-cutting means lower wages.  And around we go...