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'02 - '04 US productivity best for over 50 years
Productivity is slowing, but wow, what huge growth over the last 3 years! 
Productivity is the single biggest determining factor of the long-term living standard of a nation, so this sort of increase is fantastic news!
Productivity is the single biggest determining factor of the long-term living standard of a nation, so this sort of increase is fantastic news!
2004 Productivity Rate Caps Three-Year Run
By Martin Crutsinger
AP Economics Writer
Thursday, February 3, 2005; 8:41 AM
The productivity of American workers, the critical component for rising living standards, increased by 4.1 percent in 2004, capping a remarkable three-year period in which worker efficiency climbed at the fastest pace in a half century.
However, the Labor Department reported Thursday that productivity for the final three months of the year was up at an annual rate of just 0.8 percent, which was the slowest quarterly increase in almost three years.
The rapid gains in productivity began slowing in the July-September quarter when productivity rose by just 1.8 percent after increases at rates of 3.7 percent in the first quarter and 3.9 percent in the second quarter last year.
Productivity, the amount of output produced for each hour of work, is the key factor in boosting living standards because it allows companies to pay their workers more based on their increased efficiency without having to resort to raising the price of their products, which would increase inflation.
Productivity rose by 4.4 percent in both 2002 and 2003. When combined with the 4.1 percent increase last year, the 4.3 percent average gain for those three years was the strongest burst in productivity since 1948 to 1951.
However, the downside of that increased efficiency is that companies, by getting more output from their existing work force, are able to avoid hiring new workers.
That is what occurred during the recession year of 2001 and the following two years in which job losses mounted as companies, pressed by increased global competition, strove to get increased production from slimmer work forces.
The strong productivity gains have kept the lid on inflation, but now with productivity slowing, some analysts are concerned that the Federal Reserve will abandon its gradual approach to raising interest rates should wage pressures begin to mount.
In a second report, the Labor Department said that the number of newly laid off workers filing claims for unemployment benefits totaled a seasonally adjusted 316,000 last week, a decrease of 9,000 from the previous week, pushing new claims to the lowest level since early December. Claims had risen by 7,000 the previous week after having plunged by 49,000 for the week ending Jan. 15.
The decline of 9,000 jobless claims last week represented a better-than-expected showing. Many analysts had been forecasting not a drop but an increase of about 5,000 in new claims being filed. The four-week moving average of claims dipped to 331,500, the lowest level since early January.
On Friday, the government will report on unemployment in January. Many analysts are looking for the jobless rate to remain steady at 5.4 percent with businesses adding 200,000 workers to their payrolls, an improvement from the 157,000 jobs added in December.
For all of 2004, employment grew by 2.2 million workers, the first annual gain after three years of job losses as the counry struggled to cope with the 2001 recession and a jobless recovery that reflected in large part the ability of U.S. companies to get more output from a smaller work force.
The productivity report also showed that output rose by 2.8 percent in the fourth quarter while the number of hours worked was up by 1.9 percent.
The 0.8 percent increase in productivity for the fourth quarter was the weakest showing since a 0.4 percent drop in the first three months of 2001.
By Martin Crutsinger
AP Economics Writer
Thursday, February 3, 2005; 8:41 AM
The productivity of American workers, the critical component for rising living standards, increased by 4.1 percent in 2004, capping a remarkable three-year period in which worker efficiency climbed at the fastest pace in a half century.
However, the Labor Department reported Thursday that productivity for the final three months of the year was up at an annual rate of just 0.8 percent, which was the slowest quarterly increase in almost three years.
The rapid gains in productivity began slowing in the July-September quarter when productivity rose by just 1.8 percent after increases at rates of 3.7 percent in the first quarter and 3.9 percent in the second quarter last year.
Productivity, the amount of output produced for each hour of work, is the key factor in boosting living standards because it allows companies to pay their workers more based on their increased efficiency without having to resort to raising the price of their products, which would increase inflation.
Productivity rose by 4.4 percent in both 2002 and 2003. When combined with the 4.1 percent increase last year, the 4.3 percent average gain for those three years was the strongest burst in productivity since 1948 to 1951.
However, the downside of that increased efficiency is that companies, by getting more output from their existing work force, are able to avoid hiring new workers.
That is what occurred during the recession year of 2001 and the following two years in which job losses mounted as companies, pressed by increased global competition, strove to get increased production from slimmer work forces.
The strong productivity gains have kept the lid on inflation, but now with productivity slowing, some analysts are concerned that the Federal Reserve will abandon its gradual approach to raising interest rates should wage pressures begin to mount.
In a second report, the Labor Department said that the number of newly laid off workers filing claims for unemployment benefits totaled a seasonally adjusted 316,000 last week, a decrease of 9,000 from the previous week, pushing new claims to the lowest level since early December. Claims had risen by 7,000 the previous week after having plunged by 49,000 for the week ending Jan. 15.
The decline of 9,000 jobless claims last week represented a better-than-expected showing. Many analysts had been forecasting not a drop but an increase of about 5,000 in new claims being filed. The four-week moving average of claims dipped to 331,500, the lowest level since early January.
On Friday, the government will report on unemployment in January. Many analysts are looking for the jobless rate to remain steady at 5.4 percent with businesses adding 200,000 workers to their payrolls, an improvement from the 157,000 jobs added in December.
For all of 2004, employment grew by 2.2 million workers, the first annual gain after three years of job losses as the counry struggled to cope with the 2001 recession and a jobless recovery that reflected in large part the ability of U.S. companies to get more output from a smaller work force.
The productivity report also showed that output rose by 2.8 percent in the fourth quarter while the number of hours worked was up by 1.9 percent.
The 0.8 percent increase in productivity for the fourth quarter was the weakest showing since a 0.4 percent drop in the first three months of 2001.
fair one.
Rather, it'll be syphoned off to (a) increase dividends to the investors or (b) be used to buy out other companies, leading to decreased competition, which in turn leads to increased prices and decreased services. 
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