US productivity slows

US workers productivity gains have slowed

The key driving force behind recent US economic expansion has shown signs of waning, according to data from Washington.

Worker productivity, a key measure of labour costs, grew at an annual rate of 2.4% in the final three months of 2000.

Durable-goods manufacturing saw gains of 4.7% in productivity.

That compares with a revised growth rate of 3% in the previous quarter and a near all-time high of 5.3% in the second quarter.

Financial analysts, including Federal Reserve chairman Alan Greenspan, have credited such stellar gains in worker productivity for keeping inflation in-check during the recent economic boom in the US.

While worker productivity still grew, it dropped below the average 3% growth rate analysts believe will keep the US from a painful recession.

In preparing the report, the Labor Department noted that for 2000 as a whole, productivity increased at a rate of 4.3%, the strongest showing since the 4.5% gain in 1983.

Inflation fears

But the Labor Department also reported unit-labour costs rose at an annual rate of 4.1% in the fourth quarter - higher than analyst estimates and much higher than revised third-quarter costs, which rose 3.2%.

Unit labour costs are used as a gauge of inflationary pressures within the economy.

For the year, labour costs edged up 0.7%, down from 1999's 1.8% gain.