ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, November 8, 1996 TAG: 9611080062
SECTION: BUSINESS PAGE: A13 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
The productivity of the American workplace barely improved this past summer, the government said Thursday in a report that contained hints of mounting inflation pressures.
The Labor Department reported that nonfarm productivity - output per number of hours of work - inched up just 0.2 percent at a seasonally adjusted annual rate from July through September.
The growth, short of the 0.5 percent increase during the April-June quarter, was the slowest since productivity actually fell 1.1 percent in the final three months of 1995.
Many analysts had expected the third-quarter performance to be even worse - a decline of about 0.2 percent.
Productivity is a key to Americans' standard of living. Its poor performance has been blamed for stagnant personal incomes for more than two decades.
For instance, productivity increases averaged just 1 percent from 1973 to 1995, That was only about one-third the growth rate of the 1950s and 1960s.
Greater efficiency means businesses can increase wages without raising prices, since workers are producing more with the same amount of work. If unmatched by productivity gains, labor costs could be passed on to consumers.
Indeed, the report showed that unit labor costs - typically two-thirds of a product's price - shot up at a 3.7 percent rate. Costs had risen 3.3 percent in the second quarter and just 1.5 percent in the first.
In another report Thursday, the Federal Reserve said consumer credit fell 2.7 percent in September, the first decline in more than three years. Debt decreased by $2.6 billion, to $1.17 trillion, after advancing 5.2 percent a month earlier.
It was the first drop since consumer credit slipped 0.3 percent, or $200 million, in May 1993. Consumer credit includes all household debt not secured by real estate.
Both auto loans and the category that includes loans for mobile homes, education, boats, trailers and vacations shared in the loss. Revolving credit, which includes credit cards, posted the only gain.
LENGTH: Short : 49 lines ILLUSTRATION: GRAPHIC: chart - Productivity APby CNB