WASHINGTON (AP) -- The remarkable improvement in American workers' productivity in recent years is likely to continue despite the slowdown in the economy, Federal Reserve Chairman Alan Greenspan said Friday.
There probably will be some moderation in productivity growth because of the weaker economy, Greenspan said, but the lull should be only temporary.
Productivity, the amount of output per hour of work, is the key ingredient determining Americans' living standards. The significant pickup in productivity growth that has occurred since 1995 has been a major factor supporting the record-long economic expansion.
In a speech delivered by satellite to a bond traders convention in West Virginia, Greenspan indicated he has not lost faith in the belief that massive investments in computers and other high-tech equipment in recent years have permanently improved the outlook for productivity.
Such a development is especially important to the record government budget surpluses, Greenspan said.
Greenspan noted projections by the Congressional Budget Office and the White House Office of Management and Budget that the surplus will total $5.6 trillion over the next decade are based on a belief that the upturn in productivity seen since 1995 will continue.
He said he agrees with this assessment even though the measured rate of productivity will slow somewhat as the economy cools.
Greenspan didn't address interest-rate policy in his speech.
Brainerd Dispatch ©2013. All Rights Reserved.