Productivity Growth Slows

The pace of business productivity slips to 2.7% in the fourth quarter after surging in prior one.
By TSC Staff ,

Double disappointment on the economic front today.

Initial weekly jobless claims were higher than expected in the most recent week and business productivity was less than expected in the fourth quarter.

Productivity rose at a 2.7% rate in the final quarter of 2003, compared with economists' forecast of 3% growth. Productivity rose by a walloping 9.5% in the previous quarter.

Jobless claims for the week ended Jan. 31 rose 17,000 to 356,000. Economists had forecast claims of about 340,000.

Despite the gain, claims have been below the 400,000 level -- thought to be the dividing line between growth and contraction in the labor market -- for 18 consecutive weeks.

On Friday, the government issues its employment report for January, with economists expecting the economy created 170,000 new jobs during the month. The unemployment rate is expected to remain at 5.7%. The economy added just 1,000 jobs in December.

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