Fed chairman says economic slowdown will not constrict productivity gains

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.