U.S. productivity grows 1.9 percent in third quarter

07:46, November 05, 2010      

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Productivity in the U.S. nonfarm business sector increased at an annual rate of 1.9 percent in the third quarter, indicating the economic recovery improved to some extent, the Labor Department reported Thursday.

The third quarter figure was a rebound from a decline of 1.8 percent in the second quarter, which was the largest decline in nearly four years.0 Productivity, the amount of output per hour of work, has posted large gains since the U.S. economy began to recover from its deepest recession since the 1930s in the second half of last year. For all of 2009, productivity edged up 3.5 percent, the largest increase in six years.

U.S. economic growth was revised downward to an annual rate of 2 percent in the quarter ending September, compared to a 1.7 percent growth in the second quarter, according to the Commerce Department.

The Labor Department also reported that unit labor costs, or costs of wages and benefits for each unit of output, fell 0.1 percent in the third quarter after having risen 1.3 percent in the second quarter.

An increase in labor productivity and decline in labor costs would be a welcome sign for the U.S. employers because it means companies may become more cost effective.

But it may not a good news for U.S. labor because it indicates companies are getting more out of existing staff rather than hiring. About 8.4 million U.S. jobs were lost during the recession from December 2007 to December 2009.

Unemployment hit a high of 10.1 percent last fall and has come down only slightly since that time. The jobless rate remained at 9.6 percent in September.

Source: Xinhua


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