U.S. Productivity Soars Even Higher Than First Thought

By John S. McClenahen Both manufacturing productivity and productivity in the overall nonfarm business sector of the U.S. economy increased considerably more than first reported for the July-through-September period of this year. Revised data released by the U.S. Labor Department on Dec. 3 show manufacturing productivity in the third quarter rose at a seasonally adjusted annual rate of 9%, four-tenths of a percentage point higher than the 8.6% the department initially reported on Nov. 6. Manufacturing output increased at a seasonally adjusted annual rate of 3.5% during the quarter as hours worked fell 5%. Within manufacturing, productivity at companies that make durable goods -- products designed to last three years or more -- rose 14.8%, and productivity among nondurable goods producers increased a much more modest 3.1%. For the larger nonfarm business sector of the economy, the revised numbers show productivity increased at a seasonally adjusted annual rate of 9.4% during the third quarter, 1.3 percentage points higher than the 8.1% the Labor Department reported a month ago. From July through September, output rose 10.3% while hours worked advanced 0.8%. The increase in output was the largest since the third quarter of 1983, when output advanced 11.5%.

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