US Productivity Rises While Labor Costs Drop
By Martin Crutsinger |
December 4, 2009, Friday
|
Print Edition
Print Edition
UNITED States productivity surged in the third quarter by the largest amount in six years while labor costs fell.
While that indicates inflation remains under control, it also signals workers' wages are being squeezed, raising doubts about the durability of the economic recovery.
The US Commerce Department yesterday said productivity was rising at an annual rate of 8.1 percent in July-September period, the biggest jump since 2003, while unit labor costs were falling at a 2.5-percent rate.
The productivity gain was revised down from an initial estimate of 9.5 percent made a month ago while the drop in unit labor costs was less than the 5.2-percent plunge first reported. The revisions were larger than economists had expected. The revisions reflected the fact that the government last week trimmed its estimate for growth in the overall economy from a rise of 3.5 percent for the gross domestic product, down to a smaller rise of 2.8 percent.
While that indicates inflation remains under control, it also signals workers' wages are being squeezed, raising doubts about the durability of the economic recovery.
The US Commerce Department yesterday said productivity was rising at an annual rate of 8.1 percent in July-September period, the biggest jump since 2003, while unit labor costs were falling at a 2.5-percent rate.
The productivity gain was revised down from an initial estimate of 9.5 percent made a month ago while the drop in unit labor costs was less than the 5.2-percent plunge first reported. The revisions were larger than economists had expected. The revisions reflected the fact that the government last week trimmed its estimate for growth in the overall economy from a rise of 3.5 percent for the gross domestic product, down to a smaller rise of 2.8 percent.
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