Thursday, September 06, 2007

Productivity Strong and Inflation Low

Simply stated - more head room for the Fed to do what it needs to do - cut the Fed Funds Rate................

Productivity Grows at Faster Pace
US Worker Productivity Rebounds Strongly, Wage Pressures Ease Sharply in the Spring

WASHINGTON (AP) -- Worker productivity rebounded, growing at the fastest pace in nearly two years, while wage pressures eased sharply in the spring -- developments that should reduce inflation worries.

The Labor Department reported Thursday that productivity, the amount of output per hour of work, jumped to an annual growth rate of 2.6 percent in the April-June quarter, even better than the 1.8 percent increase that was originally reported.

Wage pressures, as measured by unit labor costs, slowed to an annual growth rate of 1.4 percent, slower than the initial estimate that labor costs were rising at a 2.1 percent rate..................

................The increase in productivity and the reduction in labor costs were better than had been expected, raising hopes that the Federal Reserve will have the leeway to cut interest rates at its next meeting on Sept. 18...........

-By Martin Crutsinger, AP Economics Writer

For rest of story link here

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