U.S. Productivity Unexpectedly Strong

By John S. McClenahen For the final calendar quarter of 2001, U.S. nonfarm business productivity rose at an unexpectedly strong annual rate of 3.5% as output decreased 0.4% and hours worked declined 3.7%, show data from the U.S. Labor Department's Bureau of Labor Statistics. That's "a spectacular performance in the face of a recession," opines Gerald D. Cohen, a senior economist at Merrill Lynch & Co., New York. Cohen notes the productivity usually declines during a recession and figures that a 1.6% rise in productivity for full year 2001 accounts for all of the year's GDP growth. Meanwhile, Maury Harris, chief U.S. economist at UBS Warburg in New York, is optimistic about the future. "In our view, productivity prospects remain bright. The uptick in productivity that emerged in the mid-1990s appears to be withstanding the test of recession."

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