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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (488056)	11/6/2003 10:02:39 AM
From: Hope Praytochange	Read Replies (1) \| Respond to of 769670

Productivity Rises in 3rd Quarter; Weekly Jobless Claims Fall By THE ASSOCIATED PRESS ASHINGTON (AP) -- Productivity of U.S. companies in the third quarter registered the best showing since early 2002 and new claims for unemployment benefits last week plunged to the lowest level in more than two years. The pair of Labor Department reports Thursday raised new hopes that businesses may be more confident than before that the economic rebound is genuine. The behavior of businesses -- especially their willingness to step up investment and hiring in the coming months -- will play an important role in determining the vigor of any resurgence. Productivity -- the amount an employee produces per hour of work -- grew at an annual rate of 8.1 percent in the July-to-September quarter, the fastest pace since the first quarter of 2002. That was up from a 7 percent clip in the second quarter, the department reported. The third-quarter's performance, however, was slightly weaker than the 8.5 percent growth rate that some economists were predicting. In a second report, new applications for jobless benefits last week plummeted by a seasonally adjusted 43,000 to 348,000. That marked the lowest level since the week ending Jan. 20, 2001, and was much better than the 380,000 level that economists forecast. The four-week moving average of new claims, which smooths out weekly fluctuations, dropped to 380,000 last week, the best showing since the week ending March 10, 2001. The jobless figures offered a hopeful sign that the battered job market may be turning a corner. But a more important indicator of the labor market's health will be Friday's employment report for October. Some economists believe the economy added around 65,000 jobs last month, helping to hold the nation's unemployment rate at 6.1 percent. Job growth, however, will need to be much stronger than that each month to push the overall unemployment rate down and bring about sustained improvements. In the productivity report, businesses in the third quarter pumped out more and actually made a small increase in workers' hours, compared with a long string of quarters where hours were either cut or were flat. Companies' output in the July-to-September quarter rose at a 8.8 percent rate -- the fastest pace since the end of 1992, and up from a 4.6 percent growth rate in the second quarter. Workers' hours, meanwhile, increased at a 0.7 percent rate in the third quarter, a turnaround from the 2.2 percent rate of decline reported in the previous quarter and offering another hopeful sign for the labor market. For the economy's long-term health and rising living standards, solid productivity gains are crucial. They allow the economy to grow faster without triggering inflation. Companies can pay workers more without raising prices, which would eat up those wage gains. And, productivity gains can bolster a company's profitability. Economists are hopeful that businesses will in time begin to hire more as profits improve. Companies' unit labor costs fell at a rate of 4.6 percent in the third quarter, boding well for profit margins. That compared with a 3.2 percent rate of decrease in the second quarter. In deciding to hold a main short-term interest rate steady at a 45-year low of 1 percent last week, policy-makers at the Federal Reserve Board said such low rates, "coupled with robust underlying growth in productivity," are providing significant support for overall economic activity.