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Bloomberg.com: Productivity in the U.S. unexpectedly accelerates

From staff reports

The productivity of U.S. workers unexpectedly increased in the last three months of 2010 as companies sought to contain costs, according to a Feb. 3, 2011, report from Bloomberg.com.

Figures released by the U.S. Labor Department on Feb. 3 showed that employee output per hour rose at a 2.6 percent annual rate, compared with a revised 2.4 percent gain in the previous three months. Economists projected a 2 percent advance, according to a Bloomberg News survey. Labor expenses also fell for fifth time in six quarters.

The report said that employment may improve as companies such as Ford Motor Corp., which cut jobs and boosted efficiency during the recession, now look to expand as sales pick up. Falling labor costs give the Federal Reserve more reason to stick to its unconventional easing program through June.

“There is a good chance that productivity will slow further this year, as firms are increasingly forced to hire more workers to expand output,” Paul Ashworth, chief U.S. economist at Capital Economics Ltd. in Toronto, said in a note to clients. “That is good news for the unemployed.”

Another Labor Department report showed the number of Americans filing first-time claims for unemployment insurance fell last week, led by southern states that were affected by storms in prior weeks. Applications for jobless benefits decreased by 42,000 to 415,000 in the week ended Jan. 29.

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