Productivity in U.S. Climbed 6.2%, Labor Costs Fell

The productivity of U.S. workers kept surging in the fourth quarter as companies squeezed more out of remaining staff to boost earnings.

A measure of employee output per hour rose at a 6.2 percent annual rate, capping the biggest one-year gain since 2003, the Labor Department said today in Washington. Labor costs dropped at a 4.4 percent pace, more than anticipated, and fell 0.9 percent for all of 2009, the biggest drop in seven years.

Efficiency improved last year as companies slashed worker hours even after sales stabilized, a feat that may be difficult to sustain much longer as demand continues to grow. Lower expenses also help curb inflation, giving the Federal Reserve room to keep the benchmark lending rate near zero.

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- Posted: 2010-02-04 10:56:49

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