Report indicates lackluster growth
WASHINGTON - Growth in American workers' productivity slowed to a lackluster pace in the April-June quarter, but labor costs remained contained, posing little threat of inflation.
Non-farm business productivity - output per hour worked - grew at a seasonally adjusted annual rate of just 0.6 percent in the second quarter, the Labor Department said Tuesday.
That was less than half the 1.4 percent annual rate during the first three months of the year and the worst showing since the third quarter of 1996 when productivity declined.
The deceleration occurred because employers did not curb their pace of hiring to match a slowdown in economic growth from a robust 4.9 percent rate in the first quarter to a moderate 2.2 percent rate in the second, said economist Elliott Platt of Donaldson, Lufkin & Jenrette Securities Corp. in New York.
Wall Street showed little reaction to the report. Traders were awaiting more influential reports today on prices paid to factories and other producers, and Thursday on prices paid by consumers.
After rising as much as 30 points in the morning, the Dow Jones average of 30 industrial stocks tumbled 101.27 points for the day, closing at 7,960.84 - below 8,000 for the first time in three weeks.
Shareholders approve merger
CHICAGO - Shareholders in paper products makers Fort Howard Corp. and James River Corp. approved a merger Tuesday that creates a new company with more than $7 billion in annual sales.
The approval came at separate shareholder meetings in Chicago and followed regulatory clearance of the merger in the United States and Europe last week.
The combined company will be known as Fort James Corp., with corporate offices in Richmond, Va., and Chicago.
The merger creates the No. 1 tissue maker in North America and the No. 2 maker internationally, a Fort Howard official said.
Fort Howard has mills in its headquarters in the towns of Green Bay, Wis., Savannah, Ga., and Muskogee, Okla.
James River is the world's No. 2 maker of tissues behind Kimberly-Clark Corp., with $5.7 billion in sales last year. It makes Brawny paper towels, Quilted Northern bathroom tissue, Vanity Fair napkins and Dixie cups and plates.