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To: yard_man who wrote (170560)	6/6/2002 9:31:09 AM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 436258

Fed Broaddus: US Productivity Growth May Slow Job Growth (This article was originally published Wednesday) WASHINGTON (Dow Jones)--Rapid increases in the productivity of U.S. workers this year may slow the pace of job creation in the near term as employers squeeze more out of existing workers, a prominent Federal Reserve policymaker said Wednesday. That could also crimp the U.S. economic recovery, although a "double-dip recession" is unlikely, J. Alfred Broaddus, president of the Federal Reserve Bank of Richmond, told reporters after a speech to the Washington Association of Money Managers. "I'm not one who believes there's a significant risk of a renewed downturn," Broaddus said. The U.S. economy grew by 5.6% during the first three months of 2002, recovering quickly from a recession in 2001. But the rebound hasn't generated much job growth yet: the unemployment rate rose to an eight-year high of 6% in April and is expected to have increased again in May. Broaddus said the weak jobs market could reflect the growing efficiency of U.S. workers, whose productivity increased by 8.4% in the first quarter - the fastest rate since 1983. "We could have a really strong, continuing upward increase in output and slower increases in labor inputs because of productivity growth," he said. "If there is slow growth in jobs, and that leads to slower growth in income, there's the possibility that could at some point have an impact on consumer confidence and spending," Broaddus said. That, however, would merely slow the economic recovery - not kill it, he said. Productivity growth, however, isn't likely to restrain job growth for long, Broaddus said. "I don't think it's going to continue forever," he said. "As we move through the remainder of the year, we'll begin to get a better sense of how that's going to work." -By Joseph Rebello, Dow Jones Newswires; 202-862-9279; Joseph.Rebello@dowjones.com