Productivity Index Rises Moderately : Output: Despite surge in latter half of ‘93, the 1.6% gain is half that of ’92.

The productivity of American workers increased a moderate 1.6% last year, just half as fast as in 1992, when it grew at the steepest pace in two decades, the government said today.

But the Labor Department report showed productivity rising at a brisk 4.2% seasonally adjusted annual rate in the final three months, even better than the 4% jump from July through September.

The department said the annual increase in productivity--defined as output per number of hours worked--was the fourth straight, following a revised gain of 3.1% in 1992 and gains of 1.1% in 1991 and 0.4% in 1990.

The 1992 advance originally was estimated at 2.7%. Productivity fell 0.9% in 1989, the first drop in nine years.

Separately, the Commerce Department reported that sales at the wholesale level weakened in December for the first time in three months, while stocks of unsold goods rose.

Sales fell 0.6% to a seasonally adjusted $161.03 billion after a revised 0.4% rise in November, which previously had been reported as a much stronger 1% increase.

Total inventories at wholesalers rose 0.4% in December to a seasonally adjusted $217 billion following a 0.5% increase in November. Inventories had fallen in October by 0.1%.

The inventory-to-sales ratio, which measures how long it would take to liquidate stocks at the current sales pace, rose in December to 1.35 months from 1.33 months in November.

Economists maintain that increased productivity is essential for improved living standards and to make American products more competitive in overseas markets.

Productivity helps boost living standards by restraining inflation. Continued gains tend to keep labor costs down. Labor represents about two-thirds of the cost of a product.

Unit labor costs rose 1.9% in 1993, down slightly from 2% a year earlier.

But the improvement in productivity is coming at the expense of American jobs, as many companies restructure and shrink their work forces in efforts to increase long-term efficiency.

The 1993 improvement includes a seasonally adjusted 4.2% annual rate of increase in the October-December quarter that matched the gain in the final quarter a year earlier.

Productivity

Percent change from previoius year.

1993: 1.6%

Source: Labor Department