US non-farm productivity up, output at 6-yr high

WASHINGTON, Feb 4 (BestGrowthStock) – U.S. non-farm productivity
rose faster than expected in the fourth quarter as employers
ramped up output at the quickest pace in six years and kept a
lid on costs, a government report showed on Thursday.

The Labor Department said non-farm productivity rose at a
6.2 percent annual rate after expanding at a 7.2 percent pace
in the third quarter.

Analysts polled by Reuters had forecast productivity, which
measures the hourly output per worker, rising at a 6.0 percent
rate in the fourth quarter. For the whole of 2009, productivity
grew 2.9 percent, the biggest increase since 2003, the
department said.

Despite the worst economic downturn since the Great
Depression, productivity has grown for five straight quarters
as employers slashed costs, mostly head count. Some analysts
believe companies cannot continue to boost output without
starting to hire new workers.

However, others reckon companies will hold off new hires,
while gauging the strength of the economic recovery and instead
opt to extend working hours and make temporary workers
permanent staff. The economy grew at a 5.7 percent pace in the
fourth quarter, its fastest clip in six years.

Total non-farm output grew at a 7.2 percent rate in the
final three months of 2009, the fastest rate since the third
quarter of 2003, accelerating from a 2.2 percent pace in the
third quarter.

Hours worked rose at a 1.0 percent rate in the fourth
quarter, the first increase since the second quarter of 2007
and the fastest pace since the fourth quarter of 2006. Unit
labor costs, a gauge of inflation and profit pressures closely
watched by the Federal Reserve, fell a steeper than expected
4.4 percent after declining 1.5 percent in the third quarter.
Analysts had expected unit labor costs to fall 2.5 percent in
the fourth quarter

Stock Research

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

US non-farm productivity up, output at 6-yr high