The productivity of US workers grew strongly in the second quarter but the increase was less impressive than originally thought, the US labour department said today.
The latest figures on non farm productivity, measuring the amount of goods and services workers produce each hour, showed a 2.1 per cent annual-rate gain for the April-to-June period. That was revised downward from the 2.5 per cent pace the department had previously estimated.
However, the productivity growth rate was still solid, given the US economy's weakness. Productivity growth, which in the longer run is key to rising standards of living, is typically lackluster during economic slowdowns.
The revised second-quarter productivity number was a shade better than the 2 per cent pace projected by US economists.
Productivity growth, and the contribution new technology makes to it, has been an issue of key interest to Federal Reserve chairman Mr Alan Greenspan in recent years. Mr Greenspan has hailed productivity gains that have enabled the economy to grow faster without inflation.
The information economy was the main theme at a top-notch symposium in Jackson Hole, Wyoming, attended by Mr Greenspan and other policymakers, academics and business economists last weekend.
Uncertainty dominated the discussions, with several participants saying the US economy can successfully skirt recession if productivity holds up, but that it could face trouble if output per worker falls to rates close to the 1 per cent per year averaged during in the 1970s and 1980s.
The US economy barely edged ahead at a 0.2 per cent annual rate in the second quarter, its slowest growth in eight years.