U.S. Productivity Rises 2.6% in Fourth Quarter, Costs Fall (1) – Bloomberg.com

Labor Mar 04, 2011 No Comments

For all of 2010, productivity climbed 3.9 percent, the most since 2002. Labor costs fell 1.5 percent after a 1.6 percent decrease in 2009. It was the first back-to-back drop since 1962- 63, the Labor Department said.

March 3 (Bloomberg) — The productivity of U.S. workers increased in the fourth quarter at a faster pace as companies sought to pare costs to preserve profits.

The measure of employee output per hour rose at an unrevised 2.6 percent annual rate after a third-quarter gain of 2.3 percent, figures from the Labor Department showed today in Washington. Labor expenses fell for a second straight year.

Increased demand may prompt companies such as Intel Corp. to ramp up hiring as they bump up against efficiency limits with their current labor force. Declines in labor expenses help keep inflation contained amid rising commodity prices, giving the Federal Reserve scope to complete its unconventional easing program through June.

“Businesses have consistently surprised on the upside by squeezing out productivity gains,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said before the report. “We’re hoping some of the pickup in demand will translate into stronger job growth, perhaps at the cost of slippage in productivity.”

via U.S. Productivity Rises 2.6% in Fourth Quarter, Costs Fall (1) – Bloomberg.com.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.