Thursday, July 30th9.8°C
26925

US productivity grew at 3.2 per cent rate in fourth quarter as labour costs kept falling

WASHINGTON - U.S. productivity growth slowed in the fourth quarter while labour costs kept falling. For the year, productivity turned in another weak gain.

Productivity grew at an annual rate of 3.2 per cent in the October-December period, down slightly from a 3.6 per cent growth rate in the third quarter, the Labor Department reported Thursday. Labor costs fell at a 1.6 per cent rate in the fourth quarter after an even bigger 2 per cent rate of decline in the third quarter.

For the year, productivity rose a slight 0.6 per cent, down from a 1.5 per cent increase in 2012, and the weakest performance since an 0.5 per cent rise in 2011. Labor costs edged up a slight 1 per cent in 2013, continuing a trend of modest gains in labour costs.

Productivity measures output per hour of work. Greater productivity raises living standards because it enables companies to pay their workers more without having to raise prices which could boost inflation.

The Federal Reserve monitors productivity and labour costs for any signs that inflation could pick up. Mild inflation has allowed the Fed to keep short-term interest rates at record lows and purchase bonds to try to keep long-term rates down.

The Fed in December and again in January announced that it was reducing its monthly bond purchases, taking them from $85 billion per month down to $65 billion.

But at the same time, the Fed strengthened its commitment to keep short-term rates low for an extended period. It expects to keep those rates low "well past" the time that unemployment dips below 6.5 per cent. The unemployment rate is currently 6.7 per cent.

In records going back to 1947, productivity has been growing by about 2 per cent per year.

In 2010 and 2011, productivity increased at annual rates above 3 per cent. That reflected the fact that millions of Americans were laid off as companies struggled to cope with a deep downturn. While output was down as well, the number of workers fell more, increasing the rate of productivity.

After that initial jump, productivity has slowed in recent years.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14254.13-47.67
S&P CDNX586.70+1.94
DJIA17670.15-81.24
Nasdaq5083.68-28.05
S&P 5002099.34-9.23
CDN Dollar0.7676-0.0045
Gold1096.90+0.60
Oil49.17+0.01
Lumber253.00+1.40
Natural Gas2.883+0.062

 
Okanagan Companies
Pacific Safety0.18+0.01
Knighthawk0.010.00
QHR Technologies Inc1.40+0.03
Cantex0.05+0.00
Anavex Life Sciences0.775-0.012
Metalex Ventures0.045-0.005
Russel Metals19.07-0.14
Copper Mountain Mining0.82-0.03
Colorado Resources0.06+0.00
ReliaBrand Inc0.0045-0.0022
Sunrise Resources Ltd0.03+0.00
Mission Ready Services0.14-0.01
Decisive Dividend Corp2.50-0.08

 



26744

FEATURED Property
2357488Lake Okanagaon Resort
$74,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Chasing ducks

Photo: Thinkstock.comWhen businessmen tell me that being low priced is the only way to stay in business, I am skeptical. Price is the simplest way for a consumer to compare and is overused as the basi...


Taking care of business

Photo: Thinkstock.comRetirement as a goal has changed a lot over the years. There was a time, it was the only goal. You’d punch the clock and count the years until you could stop punching that t...


Income from home equity

Photo: Thinkstock.comWhen retirement funds run low, seniors often ask if tapping into the equity in their home is the right way to retain financial independence. To see if this option might be a good ...

_



27052

26509


Member of BC Press Council