U.S. Workers' Productivity Rose 1.4 Percent Last Year; Nonfarm Index Betters 1987's 0.8 Gain
U.S. workers' productivity increased 1.4 percent last year, the government reported yesterday, an improvement that nonetheless revived doubts about economic projections at the heart of President Bush's spending plans.</br></br>The 1.4 percent gain in nonfarm business productivity was up from 0.8 percent in 1987 and matched the average 1.4 percent annual gain experienced since the end of the 1981-82 recession, the Labor Department reported.</br></br>Increased productivity-getting each worker to produce more each hour that he or she is on the job-is vital to economic growth without inflation, particularly given the current squeeze in the labor market.</br></br>Total business productivity, including farming, fell at a 2 percent annual rate in the fourth quarter of 1988 because of a drop in farm productivity. Manufacturers reported a 3.2 percent increase in productivity last year, down from 3.4 percent in 1987, the Labor Department said.</br></br>In his final budget, former president Ronald Reagan forecast a 1.2 percent productivity gain in 1989, a 1.8 percent rise in 1990, a 2 percent jump in 1991 and 2.1 percent increases the next three years.