WASHINGTON - Companies are finding ways to do more with fewer workers, dimming hopes that hiring will take off anytime soon.
Employers became leaner and more efficient in the third quarter. Wages, meantime, remain flat or falling. The result is that productivity - output per hour of work - jumped at the fastest pace in six years.
The good news for companies, though, may be bad news for the jobless. As long as companies can get their workers to produce more, they have little reason to hire, at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk.
Still, some economists, encouraged by the productivity report, say that eventually, employers won't be able to squeeze more from their staffs. They will then have to ramp up hiring, something that could happen next year, even though the jobless rate could hit double digits.
Productivity nationally rose at an annual rate of 9.5 percent in the July-September quarter, the Labor Department said yesterday. That was much better than the 6.4 percent gain economists had expected.
While companies aren't doing much hiring, they're not cutting as many workers, either. The number of newly laid-off workers filing claims for unemployment benefits last week fell to the lowest level in 10 months.Separately, the Labor Department said first-time claims for jobless benefits last week fell by 20,000 to a seasonally adjusted 512,000. That's better than economists' estimates of 523,000.
Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of employers' willingness to hire workers.
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