Production outpacing labor costs

In the fourth quarter, productivity rose 6.2 percent on an annual basis while output rose 7.2 percent and hours worked gained 1 percent. Labor costs, meanwhile, dropped 4.4 percent, a sign that the economic recovery has begun with a step up in production without additional hiring.

"The increase in productivity, 6.2 percent, (is) outpacing the increase in hourly compensation (of 1.5 percent)," the bureau said.

For the year, productivity rose 5.1 percent, the largest four-quarter gain since the end of the first quarter of 2002.

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