Readings on worker productivity and labor costs in the final three months of 2007 were both revised higher, according to a government report Wednesday.
The Labor Department said productivity rose at a rate of 1.9% in the fourth quarter, up from an initial reading of 1.8%
Economists surveyed by Briefing.com had expected the reading to remain unchanged.
The revised growth rate is still sharply lower than the 6.3% productivity growth rate posted in the third quarter of last year.
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This article addresses the recent observations of the rising productivity and labor cost rates; these numbers were increased from the initial projection. Despite the rise of the observation for the fourth quarter, the productivity rate remains much lower than that of the third quarter. According to Sam Bullard, an economist with Wachovia, believes that this decrease in productivity is representative of the current state of the United States's economy. The Labor Department believes that the great increase in labor costs (2.1% to 2.6%) counteracts the slight rise in productivity rates (1.8% to 1.9%). According to the article, inflation will not rise to an outrageous amount if the labor costs remain steady. These percentages show the current state of the US economy, and it is now the government's job to be sure that these rates remain steady.
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