Strong U.S productivity growth should be a positive signal for stock markets Wednesday.

U.S. workers were highly productive in the third quarter, according to the U.S. Labour Department, raising their per-hour output to the fastest pace in 20 years. Non-farm business productivity grew at an annual rate of 9.4% from July through September, says the Labor Department. The increase from the third quarter of 2002 was a whopping 5%, the fastest rate in 53 years.

The revision is partly a reflection of bureaucratic number manipulation. The U.S. Commerce Department said last month that the GDP expansion was 8.2%, a full percentage point above the initial estimate. As a result, the Labor Department revised its estimate of non-farm business output to 10.3% from 8.8% initially. Workers hours increased by 0.8%, up from the initial estimate of 0.7%.

Unit labor costs fell 5.8%, the biggest decline in 20 years. Adjusted for inflation, workers’ average hourly compensation rose 0.7%, down from a 3% increase in the second quarter.

The other big news affecting the markets this morning is continuing weakness in the US$. The Euro hit a new all-time highs and the C$ is climbing toward a 10-year high against the greenback. The dollar was trading at US77.13¢, up 0.09¢ from Tuesday – the highest closing level since November 1993.Meanwhile, Wall Street index futures are marginally positive.

Here at home, Canadian investors are going over third-quarter results for Bombardier Inc. CEO Paul Tellier says the aerospace division is looking up, but the railway equipment division has not delivered satisfactory margins.

In Wednesday trading in Tokyo, stocks slipped as the US$ fell below 109 yen. The Nikkei average dropped 83.76 points to 10,326.39.

In London at midday, the FTSE 100 index is up 1.6 points at 4,380.5. Frankfurt is up 0.5%. Paris’s CAC-40 has advanced 0.4%.

On Tuesday, Toronto’s S&P/TSX composite index edged 3.03 points higher to 7,927.60, led by energy stocks. In New York, the Dow Jones industrial average slid 45.41 to 9,853.64. The Nasdaq composite index lost 9.75 points to 1,980.07. The S&P 500 index fell3.50 to 1,066.62.