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Economy: Gains In Productivity Slow; Private Sector Adds 216,000 Jobs
We have two pieces of economic news this morning:
-- First the Labor Department announced that while American workers were more productive at the end of last year, the gains in productivity slowed. The AP reports that could "signal that companies are ready to hire more workers."
"The Labor Department says productivity, the amount of output per hour of work, rose at an annual rate of 0.9% in the October-December quarter. That second and final estimate was slightly up from preliminary estimate of 0.7%. But it was just half growth in the July-September quarter.
"Labor costs increased at a 2.8% rate in the fourth quarter, slower than the 3.9% rise in the third quarter. With millions of people still out of work, economists say there is little danger that wage pressures will push inflation higher."
-- The second piece of news comes from ADP, a large payroll processor. ADP reported that the private sector added 216,000 jobs in February. Reuters reports the number topped economists expectation, who predicted an increase of 208,000. The firm also revised January figures up to 173,000 from 170,000.
The ADP survey includes only private-sector jobs, while the numbers to be released by the Bureau of Labor Statistics on Friday include government jobs.
"The latest ADP report showed large businesses with 500 employees or more added 20,000 employees to their staffs in January, while medium-size businesses added 88,000 workers and small businesses that employ fewer than 50 workers hired 108,000 new workers.
"Service-sector jobs increased by 170,000 last month, and factory jobs increased 21,000."