As Economy Slows So Does Productivity

So not surprising.

AP: The efficiency of U.S. workers slowed sharply in the summer as a huge pull back by American consumers threw the national economy into reverse.

The labour Department reported Thursday that productivity — the amount an employee produces for every hour on the job — grew at an annual pace of 1.1 per cent in the July-to-September quarter, down from a 3.6 per cent growth rate in the second quarter.

With productivity growth slowing, labour costs picked up. Unit labour costs — a measure of how much companies pay workers for every unit of output they produce– increased at a 3.6 per cent pace in the third quarter, compared with a 0.1 per cent rate of decline in the prior period.

Worker productivity growth slowed as overall production, or output, declined, reflecting the hit to consumers and the economy as a whole from the housing, credit and financial debacles.

In the latest sign of the ailing job market, the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October, a separate report from the department showed. It was the highest level since late February 1983, when the country was struggling to recover from a long and painful recession. New filings for jobless benefits last week dipped to 481,000, a still-elevated level that suggests companies are in a cost-cutting mode.

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