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EDITIONS
Thursday, 7 November, 2002, 15:17 GMT
US economy hints at growth
Inside a Ford production line
US workers are producing more in less time
US productivity grew by a healthy 4% over the summer, but this was still below market expectations.


It looks like things are stabilising in the labour market

Carey Leahey, Deutsche Bank Securities

Productivity data records the amount of output per hour of work, and is largely seen as a key part of the economy's health.

In the three months from July to September, productivity was 4% higher than in the previous three months and 5.3% higher than in the same period a year earlier, according to figures from the US Labor Department.

While these are the strongest figures for the year so far, analysts had hoped for a lift of nearer 4.3%.

They were cheered, however, with news that weekly claims for unemployment benefits had fallen well below expectations.

Holding steady

The latest figures come a day after the US central bank cut interest rates for the first time in 11 months, in a bid to boost the struggling economy.

The Federal Reserve cut rates from 1.75% to 1.25%.

Productivity levels are closely watched for an indication that the economy will rise without an increase in inflation.

In the figures to September, the manufacturing industry enjoyed its biggest year on year gain for 20 years in the three months to September.

It was up 5.9% on the previous three months and on the year.

Meanwhile unemployment claims fell from 410,000 to 390,000 in the week to 2 November.

Carey Leahey, senior economist at Deutsche Bank Securities in New York, said:

"It looks like things are stabilising in the labour market."

"Job growth is effectively zero but it's not getting any worse."


Economic indicators

Fears and hopes

US Fed decisons

IN DEPTH
See also:

07 Nov 02 | Business
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