PRODUCTIVITY: On the Up

Are most Americans working harder than before? They probably are. Evidence: productivity rose at a 6% annual rate in the year's second quarter, almost twice as fast as in the previous three months. Instead of hiring new workers, employers have been pushing people already on the job to produce more. This practice keeps unemployment high, but it makes the economy sharper and less inflationary. In the total economy, labor costs per unit of output are declining slightly. If they continue to drop, U.S. prices will moderate, and the nation's exports will become more competitive in world markets.

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