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March 06, 2007
Productivity Growth Slows, Wages Climb

The Bureau of Labor Statistics of the U.S. Department of Labor has reported revised rates of productivity change for the fourth quarter of 2006.

Productivity growth for the fourth quarter of 2006 was revised down by 1.4 percentage points from the estimates published in February, due solely to downward revisions to output.

In the fourth quarter of 2006, productivity increased at an annual rate of 1.6 percent in the fourth quarter of 2006, as output increased 2.5 percent and hours of all persons--employees, proprietors, and unpaid family workers--rose 0.9 percent. Productivity had declined 0.5 percent in the third quarter of 2006.

In the fourth quarter, hourly compensation grew 8.2 percent, and when the decrease in consumer prices was taken into account, real hourly compensation grew even faster, 10.5 percent. Real hourly compensation had fallen in the second and third quarters of 2006, following an 11.0-percent gain in the first quarter.

Unit labor costs increased at a 6.6-percent annual rate in the fourth quarter after rising 1.1 percent in the third quarter.

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