Reuters reports on the 4th quarter productivity numbers and the February non-manufacturing report from the Institute for Supply management.
Growth in U.S. productivity was faster than expected in the fourth quarter of 2004, the Labor Department said on Thursday, suggesting that inflation in the longer term remains subdued.
Complementing that news, an industry survey showed that the huge U.S. services sector, comprising about 80 percent of the U.S. economy, grew in February. Hiring in the sector also accelerated, reaching its highest level in the seven-year history of the Institute for Supply Management's non-manufacturing survey.
For the fourth quarter, the revised jump of 2.1 percent in non-farm productivity helped push unit labor costs down more sharply than economists had expected.
Along with good news on initial unemployment claims, today's statistics set us up for tomorrow's employment report.
Analysts said both the weekly jobless claims reading and the employment component of the ISM index reinforced the perception that the U.S. Labor Department's payrolls data due on Friday would show solid employment growth in February.
"The (data) reinforce the belief that we may see decent gains in payrolls on Friday," said Kevin Logan, economist at Dresdner Kleinwort Wasserstein.
We'll see if those beliefs prove justified soon enough.