Worker Productivity Rises, Labor Costs Fall

Labor Nov 03, 2011 No Comments

Worker productivity risesLabor costs dropped at an annual rate of 2.4 percent in the third quarter, the first decline since late 2010.
U.S. workers increased their productivity this summer by the largest amount in a year and half, and they cost their employers less. The trend is good for corporate profits but not necessarily for job growth.

The Labor Department says productivity rose at an annual rate of 3.1 percent in the July-September quarter after two straight quarterly declines. Labor costs dropped at an annual rate of 2.4 percent in the third quarter, the first decline since late 2010.

Productivity is the amount of output per hour of work. The big jump in productivity in the third quarter was largely because the economy had its best quarterly growth in a year while hours worked were little changed.

Higher productivity is generally a good thing because it can raise standards of living by enabling companies to pay workers more without raising their prices and increasing inflation.

via Worker Productivity Rises, Labor Costs Fall – ABC News.

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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.

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