4th-Quarter Productivity Rate Revised Upward

U.S. worker productivity shot up 4.6% in the final quarter of 1998, the fastest growth pace in six years, said the Labor Department in reporting a revision of its original estimate of a 3.7% rise. Productivity measures the speed at which workers produce goods and services. The surge led to a 1.1% decline in unit-labor costs, a closely watched gauge of wage inflation, for the quarter. “This is the magic bullet that allows us to have strong economic growth with low inflation,” said James Annable, Chicago-based economist at Banc One Corp. The quarter’s productivity gain is the biggest since a 6.2% increase for the fourth quarter of 1992. Productivity growth for all of 1998 stood at 2.2%.