Productivity up in 4th quarter as labor costs drop

Published November 17, 2014

Productivity grew in the final quarter of 2010 at the fastest pace in nine months even as economists expect a significant slowdown in productivity growth in 2011.

The Labor Department says productivity grew at an annual rate of 2.6 percent in the fourth quarter while labor costs were falling at an annual rate of 0.6 percent. Both figures were unchanged from a preliminary report a month ago.

For the year, productivity grew 3.9 percent, the biggest increase in eight years. However, economists believe productivity could grow at just half that rate in 2011 as companies reach the limit on the amount of output they can squeeze out of their existing workforces and start hiring more employees.

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