The Week Ahead

PRODUCTIVITY AND COSTS

Tuesday, Feb. 9, 10 a.m. EST -- Output per hour worked in the nonfarm business sector probably grew at a spectacular annual rate of 3.5% in the fourth quarter. That's the median forecast of economists surveyed by Standard & Poor's MMS, a division of The McGraw-Hill Companies. The highest forecast calls for a 5% surge. Productivity advanced at a 3% pace in the third quarter. In the fourth quarter, only a modest increase in hours worked was needed to produce a jump in output in the nonfarm, nonhousing economy. The median productivity forecast about matches the expected increase in total compensation, suggesting that unit labor costs did not grow in the fourth quarter. For all of 1998, nonfarm productivity likely climbed by about 2.5%, the biggest annual increase in six years.

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