The robust increase in economic growth in the fourth quarter at a time of more modest hiring suggests that nonfarm productivity rose at an annual rate of about 4% last quarter, not much below the 4.3% surge of the third period. Manufacturing productivity probably led the overall gain. The impressive advance in output per hour worked in the nonfarm sector suggests that unit labor costs may have fallen for the second straight quarter. In the third quarter, unit costs dropped at a 0.6% annual rate.

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