Productivity Jumps 5.2% in 4Q, Revised Report Says

A combination of increased output and reduced employment sent the productivity of U.S. workers and businesses, as reported by the Labor Department Thursday, up 5.2% in the fourth quarter of 2001, revised from a previously reported 3.5% figure.

The report is a sign that the economy has room to continue expanding without the threat of inflation. Continued economic growth would be good for the trucking industry, which relies on consumption and spending for much of its revenue.

In a separate report Thursday, Labor said that initial jobless claims fell 5,000 to 376,000 last week.

In the third quarter, productivity rose 1.1%, Labor said. The 5.2% jump in the fourth quarter was the largest increase since the second quarter of 2000, when it grew at 6.7%.

The huge jump in productivity, said Robert Costello, chief economist for the American Trucking Associations, could be laid to two factors. First, he said, output of goods and services has been much higher than anticipated. Second, there have been many rounds of major job cuts lately.

"When you have higher output, with fewer workers, that's really going to boost your productivity numbers," Costello said.

Several times in the past, Federal Reserve Chairman Alan Greenspan has credited U.S. productivity for the record expansion of the 1990s, and said it could potentially bring the country out of its recession.

Increased productivity allows businesses to lower prices without cutting into profits, allowing companies to use discounts to reduce inventories. Dwindling inventories lead to more orders from factories and increased business for trucking firms.

Meanwhile, the four-week moving average for jobless claims was 372,750 last week, down from 374,000. The average is a way for analysts to take the volatility out of the figure.

Weekly claims have been below 400,000 for two straight months, the longest stretch since March 1996 to April 2001. So far in 2002, initial jobless claims have averaged 378,000; in 2001 they averaged 408,000 a week.

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