THUMBS UP: Productivity Sharply Up

Physician's Money Digest, January15 2003, Volume 10, Issue 1

Gains in productivity in thethird quarter of 2002 were farbetter than predictions, with thebiggest year-over-year jump inmore than 3 decades. Productivity,which measures howmuch workers produce per hourworked, shot up 5.1% over thesecond quarter, and 5.6% overthe third quarter of 2001, thebiggest increase since 1966. Arecession usually pushes productivityrates into negative territory,and they are often slow to recover,but in this economic downturn,productivity figures have remainedpositive and growth overthe past year has been muchfaster than earlier recoveries.Increased productivity means companiescan pay workers morewithout boosting prices, which inturn means the economy cangrow without generating highrates of inflation.