
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 9, 1994                   TAG: 9403090056
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

PRODUCTIVITY FLYING HIGH

The productivity of American workers was improving at the fastest rate in eight years as 1993 came to a close, while the cost of their labor was falling at the steepest pace in 10 years.

Analysts acknowledged the improvement was coming at the expense of jobs, but contended it will mean greater employment later. And, they added, the lack of inflation means greater buying power now.

"There's unmistakable pain for workers who are not getting employed now," said economist Stephen S. Roach of Morgan Stanley & Co. in New York. "But as companies become more competitive, they will be the big job creators for the U.S. economy."

The Labor Department said nonfarm productivity - output per number of hours worked - shot up a revised 6.1 percent at a seasonally adjusted annual rate from October through December.

It was the best improvement since a 6.9 percent advance in the first three months of 1986. Fourth-quarter productivity originally was reported rising at a 4.2 percent rate.

Increased productivity helps keep prices under control and thus is essential for improved living standards and to make American products more competitive overseas.

With job creation so slow, workers generally are unable to bid up their wages and benefits. And because labor typically represents about two-thirds of the cost of a product, the report suggested little inflationary pressure.

Manufacturing productivity shot up 5.1 percent in 1993 from a 4.3 percent advance in 1992. That included a 7.5 percent jump at factories making long-lasting goods such as cars and computers.

In the fourth quarter, manufacturing productivity was rising at a 7.2 percent annual rate, up from 3 percent in the third quarter.

Total business productivity, including farming, increased 1.8 percent last year, down from 3.3 percent a year earlier. It rose at a 6.9 percent rate in the fourth quarter, up from 3.3 percent in the previous three months.

by CNB