Productivity surge thwarts Dem, Times pessimism

AP/NY Times:

Worker productivity roared ahead at the fastest pace in four years in the summer while wage pressures dropped sharply.

The Labor Department reported Wednesday that productivity, the amount of output per hour of work, was up at an annual rate of 6.3 percent in the third quarter, the best showing since the summer of 2003, and far bigger than had been expected.

Meanwhile, wage pressures slowed with unit labor costs dropping at a rate of 2 percent in the third quarter, the biggest decline in four years.

The combination of stronger productivity growth and fewer wage pressures should ease concerns about inflation at the Federal Reserve and help clear the way for another cut in interest rates next week to guard against the threat the economy could tumble into a recession.

Rising wages are good for workers. But if higher wages are not accompanied by strong productivity gains, they raise concerns among Fed policymakers about inflation.

The 6.3 percent increase in productivity was a significant upward revision from an initial estimate a month ago of a 4.9 percent increase, reflecting the fact that total output was revised higher.

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Because the NY Times is in economic decline it often looks for signs that the economy as a whole is in decline to make it appear that it is not exceptionally poorly run. That is why many of there stories have a theme about economic uncertainty. Democrats too look for gloom and doom news in hopes that it will help them get back into power. Then little things like this keep happening to show they have been wrong. The Times goes with a wire service story on the good news and buries it.