Americans Working Less; Concerns for Productivity and Economic Growth

According to a recent survey by the Bureau of Labor Statistics, one-third of Americans have been working from home in 2022 – up from a quarter in 2019. While this may be no surprise, the survey also sheds light on the fact that those working from home full time only work for an average of 5.8 hours per day – 2.5 hours less than those working in an office.

This drastic reduction in work hours is a cause for concern amongst economists, particularly since labor productivity is the foundation for economic gains. Despite the fact that the U.S economy is measured in dollars, the dollar is merely a unit of account, meaning that productivity gains are what truly impact living standards.

Interestingly enough, the total civilian population worked for an average of only 3.23 hours a day in 2022 – a drop from 3.26 hours recorded in 2019. While this may seem insignificant at first glance, such a decline in productivity can have serious implications for everything from AI to economic growth to constructing an optimal stock portfolio.

Given that labor force productivity has been negative for the past five quarters, despite sub-50 percent office occupancy in America’s largest cities, this situation appears more pressing than ever before. A 1% rate of decrease in productivity has been found across all sectors of work, meaning that the American population is becoming lazier by the day.

The Benefits of Returning to the Office

With many workers staying at home due to the COVID-19 pandemic, returning to the office has become a controversial topic. However, recent research suggests that coming back to the office can provide economic benefits.

Tesla CEO Elon Musk has gone so far as to call coming to work a “moral issue,” arguing that some employees cannot do their work from home.

In fact, if workers return to the office and work at pre-pandemic levels (8.2 hours a day), as opposed to the average at-home workday of 5.7 hours, the economy would see a significant boost in productivity. This could lead to lower prices and more output, which would help combat recession fears.

Moreover, there may be additional incentives to return to work beyond management prodding. As artificial intelligence (AI) continues to advance, it will be used to replace some jobs, adding another productivity boost.

However, it’s important not to overstate the gains from AI. According to a report by DataTrek Research Co-Founder Nicholas Colas, the substitution of AI capital for labor will take considerable time before it really moves the needle. That being said, it seems that the benefits of returning to the office may be more significant than previously thought.

Survey Predicts Microsoft’s Growth in the Second Half of 2022

Investment analysts have been keeping a close eye on various indicators to predict which stocks will outperform in the second half of 2022. According to a survey of investors, Microsoft (MSFT) is expected to lead the way.

Even if Microsoft’s growth does not perfectly align with investor optimism, traders are expected to still drive up its share prices.

Changes in American Leisure Activities Could Impact Certain Stocks

With more Americans returning to work, there has been a shift in how people spend their leisure time. Socializing has decreased, while TV watching has remained steady and gaming has increased.

If socializing continues to rise as more people return to work, beer and wine producers and distributors like Anheuser-Busch InBev (BUD) and Constellation Brands (STZ) could experience a boost. However, gaming stocks, such as Activision Blizzard (ATVI) and Electronic Arts (EA), could face headwinds if socializing takes away from Xbox usage.

Since late 2019, shares of ATVI and EA have increased significantly, but the S&P 500 as a whole has outperformed both.

It’s worth noting that decreased TV watching could hurt streaming services like Netflix (NFLX), which saw huge gains early in the pandemic. While Netflix shares soared throughout 2020 and early 2021, they have since settled at around $416 per share.

Increased Productivity Outweighs Any Negatives

Despite any shifts in leisure activities and the market’s uncertainties, economic analysts maintain the overall benefits of more productivity far outweigh the cons.

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