CHICAGO (Reuters) - Federal Reserve Chairman Alan Greenspan said on Friday it was hard to judge yet whether U.S. productivity, or output per worker, has permanently kicked into a higher gear.
Answering questions at a banking conference sponsored by the Chicago regional Fed bank, he said it was not reasonable to believe that booming productivity rates of the past six months would continue.
Productivity growth has averaged about 7 percent over the six-month period and, Greenspan noted, "human beings are not smart enough" to push output ahead at that rate forever.
"Either we are dealing with a problem of some statistical noise in the past six months or there's some special factors that may be involved," Greenspan said, though he added strong capital investment was helping make America more productive.
"In retrospect, it's conceivable, though we do not yet know, that the growth in underlying productivity in the latter years of the 1990s may have been somewhat underestimated," Greenspan said, because companies were investing so much amid a long-running expansion that began in 1991.
He said that it was even possible that a falloff in investment, after the economy went into brief recession in 2001, actually brought a rise in productivity as companies spent less and realized the benefits from the equipment they already had put in place.
