Productivity

Experts See Pleasant Productivity Surprise

The Bureau of Labor Statistics plans to revise how it calculates hourly earnings for U.S. workers and researchers believe the result will be a sharply higher figure for productivity gains in the first quarter.

  • The higher estimate should show a 2.5 percent annual productivity gain -- as opposed to a 0.5 percent gain under the old system.

  • Officials say the correction is necessary to remove distortions that arise from the fact that some months have more work days than others.

  • Productivity -- output produced per hour, per worker -- already had slowed to a 1.6 percent gain at an annual rate for the fourth quarter of 1997, after surging the previous two quarters.

  • The revisions -- which will be made to hourly earnings and average weekly hours -- won't be official until June.

Economists say that the more productivity is rising, the less likely inflation is to pick up and the greater the odds the Federal Reserve will hold interest rates steady.

Source: Beth Belton, "Productivity May Be Higher Than Figured," USA Today, May 7, 1998.

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