The Federal Reserve closely monitors productivity and labor costs for any signs that inflation is affecting wages. Mild inflation has allowed the central bank to keep interest rates at record lows in an effort to boost economic growth and fight high unemployment.
The economy grew at a 2.7 percent annual rate in the July-September quarter. That's faster than the 2 percent rate initially estimated and nearly twice the 1.3 percent growth rate in the April-June quarter.
But many economists believe growth is slowing to below 2 percent in the current October-December quarter. That's typically no enough to spur enough hiring to rapidly lower the unemployment rate, which was 7.9 percent last month.
They cite two reasons for the deceleration: Superstorm Sandy disrupted business activity in late October and early November in 24 states. And many consumers and business may be more cautious about spending because of the "fiscal cliff." That's the name for automatic tax increases and spending cuts that are scheduled to take effect in January, unless President Barack Obama and Congress reach a deal before then to avert them.