US Worker Productivity Performs Below Analyst Expectations
August 7, 2007
US worker productivity has grown at the fastest rate in over a year, despite still falling short of many analyst predictions, according to figures announced today.
The figures released by the US government today indicated that productivity amongst the American labor force had grown to 1.8% on the year over the course of last month.
However, this is still below the 2.0% mark most analysts had been predicting in the run up to the announcement, putting a damper on the positive result for the US economy.
Labour costs remained consistent over the period in which productivity increased, which has been taken as a positive step for inflation in the US economy.
The growth in productivity comes as the most substantial growth since the first quarter of last year, where productivity saw an increase of 2.5% according to Labor Department Statistics.
The news has been taken well on major stocks markets across the world as a sign of some potential recovery within the US economy, echoing a rally on the Dow Jones earlier on in the day.
After months of prolonged struggling within the US economy, the increase in productivity is considered by some to be a step in the right direction for the US, which has helped rally investor confidence over the course of today.
However, a cross section of analysts had anticipated 2% growth on the year, after 0.7% over the first quarter of 2007. The growth is seen as falling short of the level it should have reached according to other economic indicators, presenting further underlying concern behind today’s positive news.
The Federal Reserve are expected to keep interest rates at a consistent 5.25% later on today, which is also expected to result in a bounce on the Dow Jones.