Business productivity deteriorated in the second quarter...

Business productivity deteriorated in the second quarter at a rate unequaled since 1981, the government reported, prompting some analysts to predict major troubles ahead for the economy’s competitive vigor. The efficiency of non-farm businesses in producing goods and services declined 1.7% in April through June, its first decrease since 1986 and the biggest decline since 1981, the Bureau of Labor Statistics said. Allen Sinai, chief economist for Boston Co., a New York consulting firm, said the deterioration in productivity is the first hard evidence of a shortage of skills among newly hired workers. “We are scraping the bottom of the barrel, so to speak, of new labor market entrants whose skills and training may not be sufficient for using the new data processing and communications technologies that are dominating service industries,” Sinai said.