U.S. 4th-Qtr Productivity Rises at 0.8% Rate(Slowed) ; Costs Rise 2.3%

[papau]

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aNR08EMO1hlU&refer=home

U.S. 4th-Qtr Productivity Rises at 0.8% Rate; Costs Rise 2.3%
Feb. 3 (Bloomberg) -- The productivity of U.S. workers grew at a 0.8 percent annual rate from October through December, the smallest gain in almost four years, and labor costs accelerated, a government report showed.

Productivity, a measure of how much an employee produces for every hour of work, slowed from a 1.8 percent annual rate in the previous three months, the Labor Department said today in Washington. For all 2004, productivity rose 4.1 percent. Labor costs rose at a 2.3 percent annual rate last quarter, the most since the second quarter of 2002.

Businesses added 606,000 employees and boosted the number of hours worked last quarter, suggesting efficiency gains weren't enough to meet rising demand. With productivity slowing and the economy growing, employers are likely to keep hiring, economists said.

``What has been bolstering hiring is the moderation in productivity growth,'' said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. in St. Louis, before the report. ``Companies have pushed the efficiency of workers about as far as it can go and with profits up, they now have the resources to begin expanding their workforces again.''

Economists forecast fourth-quarter productivity would grow at a 1.5 percent annual rate based on the median estimate of 68 economists surveyed by Bloomberg News. Unit labor costs, or the amount paid for each unit of production, were expected to rise 2 percent.
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[mhr]

1. Productivity Down - Costs Up - Might The Economy Actually Be Slowing?

eom

[papau]

2. I doubt there ever was much speed going forward under Bush

real growth this year will be below 3% - IMHO.