Productivity Rose 0.8 Percent In 1996

Productivity, the key measurement of how fast living standards can rise, increased 0.8 percent in 1996. It was the best in four years, though still lackluster, and economists see more of the same for 1997.

Though last year’s increase in non-farm productivity more than doubled the 0.3 percent gain in 1995, it nevertheless lagged far behind the typical increases that fueled the rapid improvement in American living standards in the decades after World War II.

Productivity measures output per hour of work and its sluggishness over the past two decades is blamed for many economic problems.

The Labor Department said Tuesday that last year’s gain was boosted by a strong 2.2 percent advance, at an annual rate, in the October-December quarter, the best in three years. Productivity was unchanged in the third quarter.

In a figure reassuring to those worried about inflation, the government said unit labor costs - which take account of both hourly wages and productivity - rose at a 1.4 percent annual rate in the fourth quarter, down from 3.3 percent in the previous quarter. For the year, unit labor costs rose 2.9 percent, the same as 1995.