lim at The Skeptical Speculator does the usual fine job of summing up:
US productivity rose in the fourth quarter. Reuters reports:
Nonfarm business productivity, a gauge of how much a worker produces per hour, mounted at a 3 percent annual pace in the final three months of 2006, the Labor Department said on Wednesday...
"The strength of productivity meant that unit labor costs remained under control despite a 4.8 percent rise in hourly compensation," Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a research note...
The Nattering Naybob is not so impressed:
Q3 revised down from +0.2% to -0.1%. With the Q4 estimate, which could be revised down... 2006 productivity +2.1%, the slowest annual increase since 1997, while unit labor costs +3.2% the most since 2000.
Well, OK, but productivity growth for the year was just a bit below the 2005 pace and unit labor cost growth -- which I maintain is not the best predictor of inflation in any case -- is moving in the right direction. The story in pictures:
If you want to see the productivity trend in levels, Dr. John Rutledge is your man.