The government says that productivity rose at the slowest pace since the recession of 2001, reports the Associated Press. Wages were also up and may be hinting at inflation.

Productivity rose by 2.7 percent last year while labor costs rose by 2.4 percent, the biggest gain since a 4.2 percent increase in 2000. For the final three months of the year, productivity actually fell by 0.6 percent, the first decline since early 2001, and labor costs rose by 2.4 percent.

“The glory days of surging productivity that kept labor costs down look to be behind us,” Economis Joel Naroff tells the news service.

In related news, the New York Times reports that the national jobless rate has fallen to its lowest level in more than four years. Unemployment now stands at 4.7 percent, with the addition of 193,000 jobs last month. The construction, education, health sectors all added jobs in a strong across-the-board result.

Of course, the local rate is well below 4 percent. Those numbers coupled with falls in productivity and soaring gas prices is really going to spook the Fed over inflation. Bankers are urging the Fed to stop its regular ratcheting up on interest rates but the central bank will have to think real hard about whether we’re looking at that 70s show, “soaring oil price led inflation.”