can there be too much FUDGE?? <vbg>
Greenspan: Productivity Data Too Strong To Be Credible
WASHINGTON -(Dow Jones)- Recent data that show productivity has continued to climb despite the economic slowdown are likely "exaggerating" the underlying productivity trend, Federal Reserve Chairman Alan Greenspan said Wednesday.
"The numbers look just too large to be credible," Greenspan said, answering questions from the House Financial Services Committee.
Non-farm business productivity grew at a seasonally-adjusted annual rate of 3.5% in the fourth quarter, its fastest pace since the second quarter of 2000.
Those fourth-quarter numbers are likely to be revised even higher, Greenspan said.
"At this particular stage, unless average hours worked rises very sharply in the February-March data or payroll numbers rise significantly, we're going to have a very large increase in the first quarter," Greenspan said.
"While I doubt very much that they will be representative of the true underlying trend, they do nonetheless confirm that the long-term trend of productivity has managed to sustain itself through these very difficult times of say, the second quarter of 2000 to date. That doesn't necessarily mean it will continue," he added.
Greenspan has long championed the "New Era" view of the economy that the sharp improvement in productivity in recent years is more structural, rather than cyclical, in nature. He has often argued that this more permanent productivity improvement has allowed the economy to grow faster without sparking inflation.
"The real-time data are really quite impressive," Greenspan said of recent productivity numbers.
-By Deborah Lagomarsino, Dow Jones Newswires; 202-862-9255; deborah.lagomrsino@dowjones.com
(This story was originally published by Dow Jones Newswires) |
