Economic Data Indicate Strength

A rise in productivity showed companies continue to keep costs controlled and offered hope for jobs growth, while disparate U.S. economic reports noted continued growth in the service and manufacturing sectors.

Productivity increased while labor costs fell for the second consecutive quarter at the end of 2010, though many economists expect that a stronger economy means that businesses won't be able to keep squeezing more output from the same workers.

"There is a good chance that productivity will slow further this year, as firms are increasingly forced to hire more workers to expand output," said Paul Ashworth, chief U.S. economist at Capital Economics.

Nonfarm business productivity rose at a 2.6% annual rate in the October to December period after rising by a revised 2.4% in the third quarter, the Labor Department said Thursday. For the full year, productivity was up 3.6% in 2010 and 3.5% in 2009.

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