A New Puzzle Over Changes In Productivity: A New Puzzle Over Change in Productivity
Was there a steep drop in productivity at the nationÛªs private businesses other than farms in the second quarter of this year?</br></br>A few weeks ago the Labor Department reported .that productivity, as measured by-output per hour worked, fell at an annual rate of 5.7 percent, the greatest one-quarter decline since it began keeping the numbers in 1947. Yesterday, following some revisions in GNP figures.on output, the Labor Department revised the number to a smaller 4.3 percent rate of decline.</br></br>But that revisionby no means wipes out the puzzle some economists see in the productivity estimates. They believe that further revisions are in store for the GNP. numbers, and that the reported decline in productivityÛÓ which has major implications for future rates of inflationÛÓwill be trimmed further, perhaps even erased altogether.</br></br>The Labor Department also reported a separate set of productivity estimates for manufacturing based on the output figures in the Federal Reserve BoardÛªs Index of Industrial Production rather than CommerceÛªs" GNP numbers.</br></br>Manufacturing productivity in the second quarter rose at a 2.8 percent annual rate' compared tto -the 4.3 percent rate of decline reported for all' non-farm private business.