ECONOMIC

from job losers, the remainder of the unemployed had either left theirlast job voluntarily, newly entered the labor force, or reentered it aftera period of absence. The proportion of employees in manufacturing whoquit was high, an indication of much voluntary turnover and confidenceabout finding other jobs. The proportion of employees laid off was similarlylow. Available measures showed job vacancies were plentiful.PRODUCTIVITY AND POTENTIAL OUTPUTAlthough the rise of employment during 1973 was exceptionally high,the rise of output was just about average. Consequently the rise of outputper worker was significantly less than average. Hours of work per workerdid not decline, as they had been doing on the average for a long time. Totalhours of work rose even faster, relative to their long-term trend, thanemployment; and output per man-hour—commonly called productivity—lagged significantly below its trend rate of increase. The failure of productivityto rise more rapidly, and therefore of output to rise more rapidly,was partly a reflection of last year's excess demand. It also contributed toexcess demand and to the inflation of 1973.We have no good measures of productivity in the government sector.This sector is arbitrarily considered to have no productivity growth whentotal real output and its rate of increase are calculated, though changes inthe importance of government relative to private sector output can affectthe trend of total productivity. It is possible to say more, however, aboutproductivity in the private sector of the economy.In the past 25 years (1947-72), output per man-hour in the privateeconomy rose at an annual rate of 3.2 percent, whereas in the private nonfarmeconomy it rose at an annual rate of 2.7 percent. The private total rosefaster than the nonfarm, partly because productivity rose faster in the farmsector than in the nonfarm sector, and partly because of the continuing shiftof workers from agriculture to the nonagricultural sector. This shift raisesaverage productivity because productivity in agriculture is lower, ev^nthough it is rising more rapidly.Recently, however, productivity has been rising less in the total privateeconomy than in the private nonfarm economy. Productivity in agriculturedeclined between 1972 and 1973 instead of rising more than in thenonfarm sector. Moreover man-hours in agriculture as measured in theproductivity series fell less than usual last year, and although the rise innonagricultural man-hours was large the shift in the farm-nonfarm proportionwas not as big as usual. These two factors together depressed therise of total private productivity below the rise in private nonfarm productivity.Productivity in the nonfarm sector rose very strongly through 1972and the first quarter of 1973. Thereafter it essentially leveled out for theremainder of the year, leaving the increase between 1972 and 1973 at 3.162