U.S. Productivity Falls in Fourth Quarter

Productivity in the United States fell in the final three months of 2002, the first decline since the second quarter of 2001, the Labor Department reported Thursday.

Productivity, or the measure of how much an employee produces for every hour worked, slipped at a 0.2% annual rate in the fourth quarter, Labor said. Productivity has been consistently pointed to by business leaders as a driving force of the U.S. economy.

Analysts told Bloomberg News that in recent quarters, productivity has grown so fast, that the decline is more the product of not being able to sustain that rate of growth.

For all of 2002, productivity grew by 4.7%, the largest increase since 1950 and almost double the 2.5% average increase it posted between 1996 and 2000, Labor said.

Analysts had expected productivity to grow by 0.7% in the quarter, Bloomberg reported.

In a separate report, Labor said that initial jobless claims fell by 9,000 to 391,000 last week. The four-week moving average for claims, a less volatile indicator for the labor market, declined to 384,750 from the 385,250 it posted in the previous week.