Businessweek Archives

New Data Flash A Warning Signal On Inflation


Economic Trends

NEW DATA FLASH A WARNING SIGNAL ON INFLATION

Is the phrase "productivity-led recovery" turning out to be a misnomer? Only a few months ago, economists were heralding the rapid productivity gains of recent years as proof of an enduring productivity breakthrough.

Now, there are doubts. The government reports that nonfarm productivity dropped 1.6% last quarter, as sluggish growth coincided with upwardly revised employment gains. While the latest drop may turn out to be a statistical anomaly, economist Anthony J. Vignola Jr. of Kidder, Peabody & Co. notes that employment and workweek data in recent months suggest that productivity is headed for another fall in the second quarter. "Unless the situation changes," he warns, "the outlook is for higher output costs and inflation pressures."GENE KORETZ


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus