Output by Workers Had Slight Gain for Fourth Period
WASHINGTON -- New figures from the Labor Department offered further evidence of slack productivity in the U.S.</br></br>The output per hour by workers outside the farm sector grew at a faint 0.2% annual rate in the fourth quarter, the department reported. For all of 1989, productivity rose 0.9%, the weakest advance since 1982.</br></br>Productivity is critical to economic growth and the battle against inflation. When productivity is increasing, wages -- and living standards -- can rise without higher prices. "If we have low worker productivity, employers can't get increases {in output} and therefore the economy stagnates," says Sar Levitan, an economist at George Washington University here.</br></br>Partly because of the meager worker productivity, the labor cost of a unit of production jumped in the fourth quarter at a 6.7% annual rate compared with a 2.8% rate of increase in the third quarter, according to the report. In all of 1989, unit labor costs -- one of the most closely watched measures of inflationary pressures -- rose 4.6%. In 1988 they rose just 2.7%.</br></br>The minuscule productivity gains came in a quarter when there was little growth in the nation's real gross national product -- its total output of goods and services adjusted for inflation. The Commerce Department reported last month that the fourth-quarter GNP expanded at a 0.5% annual rate.