Worker productivity rises
WASHINGTON — U.S. worker productivity climbed 3 percent in the third quarter, the best showing in three years, while labor costs fell for a second straight quarter.
The increase in productivity in the July-September quarter was double the 1.5 percent gain in the second quarter, and both quarters were up significantly from a scant 0.1 percent rise in the first three months of the year. Labor costs fell 0.2 percent after a bigger 1.2 percent secondquarter decline, the Labor Department said.
The third-quarter figure for productivity was unchanged from an initial estimate while labor costs were initially estimated to have risen by 0.5 percent.
Economists are hopeful that the upturn in productivity may be a sign that this key measure of living standards is improving after a long weak period.
Economists believe finding ways to increase productivity, the amount of output per hour of work, is the biggest challenge facing the economy right now. They say that without an improvement, the Trump administration will have difficulty reaching its goal of doubling economic growth in coming years.
The upturn in the past two quarters reflects the fact that overall output, as measured by the gross domestic product, accelerated sharply after a weak start to the year.
Rising productivity allows employers to boost wages without triggering higher inflation.
Also Wednesday, payroll processor ADP reported that U.S. businesses added a robust 190,000 jobs in November, a sign that hiring is strong enough to reduce an already-low jobless rate.
On Wall Street, stocks took another small step backward after a plunge in the price of oil dragged down energy producers. Oil had its worst day in two months as a surge of gasoline supplies held in U.S. storage tanks signals refiners will need less crude.