November 8, 2007


Productivity surges at 4.9% annual rate
: The third-quarter result signals growth and less inflation pressure, an analyst says. (Reuters, November 8, 2007)

U.S. worker productivity rose at the strongest pace in four years in the third quarter, pushing labor costs down, the government said Wednesday in a report offering comfort to the inflation-wary Federal Reserve.

Nonfarm productivity, or hourly output per worker, increased at a 4.9% annual rate in the third quarter, the Labor Department said, well ahead of Wall Street forecasts.

It was the strongest growth in productivity since a 10.4% surge in the third quarter of 2003 and was more than double the revised 2.2% gain posted during the second quarter.

"It's a positive signal for growth and it also shows less inflationary pressure. It's very encouraging for the Fed," said economist Michelle Meyer of Lehman Bros. in New York.

...nothing costs more than it used to.

US Tops the Super Markets: Surprising news from the World Economic Forum's annual ranking of competitive economies: Europe wakes up and the US is No. 1 (Mark Scott, 11/08/07, Der Spiegel)

Red-hot emerging markets have been the engine for much of the world's economic growth in recent years. So it's a bit surprising to see gazelles such as China and India outranked by more stately performers such as Switzerland and Denmark in the annual tally by Geneva's World Economic Forum of the world's most competitive economies, released on Nov. 1.

It comes down to the infrastructure and socioeconomic factors needed to build competitive advantage. While many emerging economies post double-digit annual growth rates, they often still lack sophisticated financial markets, highly developed education systems, and the macroeconomic stability needed to outrank more established rivals on the WEF list.

Looking at competitiveness through this lens gives an especially favorable picture of the US, which jumped from sixth place in last year's survey to No. 1 in 2007 on the back of strong R&D investment and world-beating financial markets.

"The U.S. leads the pack on innovation," says Jennifer Blanke, senior economist for the World Economic Forum who oversaw the study.

Posted by Orrin Judd at November 8, 2007 12:10 PM

Just another day here in Hooverville-by-the-sea.

Posted by: Luciferous at November 8, 2007 12:55 PM

Yet we hear everyday that our economy is soft and teetering on the brink of collapse!

Posted by: Dave W at November 8, 2007 1:41 PM

Bernanke should make a speech about irrational pessimism.

Posted by: Gideon at November 8, 2007 2:05 PM

But supermodels are dumping dollars for euros. The end of the American experiment must be near.

Posted by: Patrick H at November 8, 2007 5:51 PM

Things can't be so bad - Stanley O'Neal got an $80 million severance from Merrill, and I'm sure Chuck Prince got at least that from Citi.

I like Gideon's idea.

Posted by: jim hamlen at November 9, 2007 7:50 PM
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