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To: Ruffian who wrote (52907)	12/7/1999 11:03:00 AM
From: 16yearcycle	Respond to of 152472

That was a new high.

To: Ruffian who wrote (52907)	12/7/1999 11:05:00 AM
From: T L Comiskey	Respond to of 152472

<Productivity up> W A S H I N G T O N, Dec. 7 ? American workers? productivity grew in the third quarter of 1999 at the fastest rate in seven years, while labor costs declined ? a recipe for low inflation. Productivity, defined as the amount of output for each hour of work, rose at a 4.9 percent annual rate from July through September, the Labor Department said today. That was revised upward from a previous estimate of 4.2 percent, to reflect an even bigger rebound from the second quarter, when productivity growth had slowed to 0.6 percent. Meanwhile, unit labor costs, considered a key measure of wage pressures that can lead to inflation, declined at a 0.2 percent annual rate ? the biggest drop since the spring of 1997. Goes Against Estimate of Rise A previous estimate had third-quarter labor costs rising slightly, by 0.6 percent. The report was good news for investors wary of signs of inflation that could trigger further interest rate increases from the Federal Reserve. Fed Chairman Alan Greenspan has said that the nation?s central bankers are staying alert for any slowdown in productivity as a possible early warning of inflation. As long as workers are increasingly productive, employers can afford to pay them more because of increased output without needing to raise prices. But if productivity falters, pressures for higher wages can result in inflation. Three Rate Hikes in 1999 The Fed has already raised interest rates three times this year to try to prevent inflation as the economy continues its longest expansion in peacetime history. The next meeting of Fed policy-makers is scheduled for Dec. 21. The third-quarter gain in productivity was the biggest since the last three months of 1992, when productivity rose at a 7.4 percent annual rate. It followed a small 0.6 percent gain in the second quarter of 1999 and a 2.7 percent rise in the first quarter. The slight drop in unit labor costs from July through September of this year followed a 4.2 percent rise in the second quarter and a 1.4 percent increase in the first. Greenspan has linked an upturn in American productivity in recent years to the massive investments businesses have made in computers and other technology. For all of 1998, productivity rose by 2.8 percent.