U.S. Productivity Increases 2.2%, Labor Costs Cool

``Productivity still looks pretty good,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. ``It's encouraging on the inflation front. We are seeing good cost control from businesses. It's good news for the Fed.''

``Historically, productivity growth has tended to suffer during periods of energy-price shocks,'' David Greenlaw, chief U.S. fixed-income economist at Morgan Stanley in New York, said in a note to clients. ``The current year-over-year growth rate of just a shade under 3 percent demonstrates an impressive degree of resilience.''

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