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U.S. employers added 163,000 jobs in July, the Labor Department said last week. The unemployment rate edged up to 8.3 percent. Hiring probably won't accelerate from that level unless growth picks up or productivity slows, economists say. Higher productivity boosts corporate profits, but can slow hiring in the short run. In the longer run, higher productivity also raises living standards for workers. It allows companies to increase workers' pay without pushing up inflation. Productivity grew only 0.7 percent last year after rising sharply in 2010. The main reason productivity soared in 2010 was that it followed the worst recession in decades, when employers laid off millions of workers. Economists said the trend is typical during and after a recession. Companies tend to shed workers in the face of falling demand and increase output from a smaller work force. Once the economy starts to grow, demand rises and companies eventually must add workers if they want to keep up.
[Associated
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