Data Provide a Dose of Good Economic News
Productivity grew briskly in the summer, consumers splurged in October and fewer Americans filed new claims for jobless benefits last week, a dose of good news for the wobbly economy.
Productivity -- the amount of output per hour of work -- picked up in the third quarter, growing at an annual rate of 4%, the Labor Department said Thursday. That was more than twice as fast as the second quarter’s 1.7% pace.
For the 12 months ended in September, productivity grew at a 5.3% rate, the strongest showing since the 12 months ended in the third quarter of 1983.
Gains in productivity are helping to keep a lid on inflation, an important factor for Federal Reserve policymakers as they try to energize the sputtering economic recovery.
Separately, the Fed reported Thursday that consumers are borrowing at a brisk pace, with consumer credit growing at an annual rate of 6.9% in September, up from an August growth rate of 3.9%. Consumer debt outstanding rose by $9.9 billion in September to $1.733 trillion.
“Clearly, the consumer was not discouraged by the uncertainties that have been plaguing the economy and financial markets,” said Richard Yamarone, chief economist at Argus Research in New York.
Another report from the Labor Department found that new claims for unemployment benefits dropped last week by a seasonally adjusted 20,000, to 390,000, the lowest level since early October.
Workers got paid for their efficiency. Hourly compensation -- before being adjusted for inflation -- rose at a rate of 4.8% in the third quarter, up from a 3.9% growth rate in the spring.
Adjusted for inflation, hourly compensation rose at a 2.9% rate in the third quarter, up from a 0.5% pace in the second quarter.