US experiences the highest productivity boom in 40 years

04/19/04 - Morgan Stanley

NEW YORK, April 19 (New Ratings) - Analyst Richard Berner of Morgan Stanley says that the annualized output per hour has increased by 4.8% over the past two years in the US. This has been the highest increase in productivity since 1962.

In a research note published this morning, the analyst mentions that they have analyzed the data for the recent productivity boom. Morgan Stanley believes that although the reported GDP and employment data may be revisited by statisticians, it would continue to point to a phenomenal increase in productivity. The increase in productivity was driven by companies downsizing their labor strength and a reduction in the hiring numbers due to significant healthcare and pension expenses, the analyst adds.