Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Productivity Up, But Inflation Still Looms

Escalating cost of labor helps drag down growing economy

By Heather McPherson,  Newser User

Posted Aug 7, 2007 12:54 PM CDT
Email

(Newser) – US productivity increased last quarter, but analysts are still worried about the economy’s ability to grow while keeping inflation at bay. Nonfarm business productivity rose by 1.8%, beating the first quarter’s rate of 0.7%, but the government was forced to lower productivity estimates for previous years, the Wall Street Journal reports.

Unit labor costs, which help measure the threat of inflation, also grew 2.1% in the second quarter. If productivity and labor costs are out of sync, companies may pass higher costs on to consumers. Today's new numbers and lower estimates continue to provoke questions about the economy’s resilience against inflation.

Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Thursday, July 19, 2007, as he delivers his semi-annual monetary report to the Senate Banking Committee. (AP Photo/Dennis Cook)
Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Thursday, July 19, 2007, as he delivers his semi-annual monetary report to the Senate Banking Committee. (AP Photo/Dennis...   (Associated Press)
Federal Reserve Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Wednesday, July 18, 2007, before the House Financial Services Committee. (AP Photo/Susan Walsh)
Federal Reserve Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Wednesday, July 18, 2007, before the House Financial Services Committee. (AP Photo/Susan Walsh)   (Associated Press)
Workers are seen at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of this year but wage pressures eased as well, providing evidence that inflation is being restrained. (AP Photo/Charles...
Workers are seen at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of this...   (Associated Press)
CalTrans worker Frankie Abnojer carries a cable cutter as he works on the collapsed freeway in Oakland, Calif., Thursday, May 3, 2007. Caltrans is the state agency responsible for highway, bridge, and rail transportation planning, construction, and maintenance. The Labor Department reported that productivity, the amount of output per hour...
CalTrans worker Frankie Abnojer carries a cable cutter as he works on the collapsed freeway in Oakland, Calif., Thursday, May 3, 2007. Caltrans is the state agency responsible for highway, bridge, and...   (Associated Press)
Workers pour concrete at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of this year but wage pressures eased as well, providing evidence that inflation is being restrained. (AP Photo/Charles...
Workers pour concrete at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of...   (Associated Press)
Workers are seen at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of this year but wage pressures eased as well, providing evidence that inflation is being restrained. (AP Photo/Charles...
Workers are seen at a construction site on the Dan Ryan Expressway on Chicago's South Side Wednesday, June 6, 2007. The productivity of American workers slowed sharply in the first three months of this...   (Associated Press)
Construction workers takes a lunch break at a job site with a view of the Sears Tower, center, Thursday, May 3, 2007, in downtown Chicago. The growth in worker productivity slowed in the first three months of this year but so did wages, providing evidence that a slowing economy is...
Construction workers takes a lunch break at a job site with a view of the Sears Tower, center, Thursday, May 3, 2007, in downtown Chicago. The growth in worker productivity slowed in the first three months...   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Thursday, July 19, 2007, as he delivers his semi-annual monetary report to the Senate Banking Committee. (AP Photo/Dennis Cook)
Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Thursday, July 19, 2007, as he delivers his semi-annual monetary report to the Senate Banking Committee. (AP Photo/Dennis...   (Associated Press)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

 
inflation • Ben Bernanke • economic growth • Federal Reserve • labor • US productivity • labor costs • interest rate

More Newser Stories

2008 Inflation Slowest in 50 Years on Oil Prices, Economy

Fed Likely to Hold Rates— for Now

Stocks Tumble on Weak Data

Fed Sees Slower Growth, Higher Unemployment

Fed Remains Open to More Rate Cuts
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne