US productivity declines most in nearly two years
WASHINGTON, Feb 7 — US nonfarm productivity fell in the fourth quarter by the most in nearly two years as output increased marginally despite steady gains in employment, the Labour Department said today.
Productivity declined at a 2 per cent annual rate, the sharpest drop since the first quarter of 2011 and a larger fall than the 1.3 per cent forecast in a Reuters poll.
Output rose 0.1 per cent outside the farm sector, while hours worked rose by 2.2 per cent.
Productivity is expected to rebound in the current period because analysts believe weak output during the fourth quarter was partially due to temporary factors like an unusually sharp decline in government spending on the military.
Data last week showed output in the overall economy contracted 0.1 per cent in the fourth quarter, and analysts expect gross domestic product to return to growth early this year.
Unit labour costs — a gauge of the labour-related cost for any given unit of output — jumped at 4.5 per cent rate in the fourth quarter, beating analysts’ expectations of a 3 per cent gain. — Reuters