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The
Labor Department said on Wednesday that productivity, which
measures hourly output per worker, increased at a 2.2 percent
annual rate and not the 1.6 percent pace it had reported last
month. Productivity expanded at a 3.5 percent rate in the second
quarter.
The revision to third-quarter productivity was in line with
economists' expectations and reflected upward adjustments to the
third-quarter gross domestic product estimate published last
week. The economy grew at a 2.1 percent rate in the
July-September period.
Productivity increased only 0.6 percent compared to the third
quarter of 2014, underscoring the weakness in the trend. While
that was marginally up from the 0.4 percent reported in
November, it was the slowest rise in nearly a year.
Economists blame softer productivity on lack of investment,
which they say has led to an unprecedented decline in capital
intensity. While weak productivity has boosted employment growth
as companies hired more workers to increase output, economists
say it has contributed to stagnant wages and lowered the
economy's speed limit.
Economists say persistently tepid productivity could continue to
limit wage growth even as the labor market approaches full
employment.
In the third quarter, hours worked fell at a 0.3 percent rate,
rather than the 0.5 percent decline reported in November. It was
still the first drop since the third quarter of 2009 and
reflected a decline in self-employment.
Unit labor costs, the price of labor per single unit of output,
increased at a 1.8 percent rate in the third quarter, instead of
the previously reported 1.4 percent pace. Unit labor costs rose
at a 2.0 percent rate in the second quarter.
They were up 3.0 percent compared to the third quarter of 2014.
Compensation per hour rose at a 4.0 percent rate in the third
quarter, revised up from the 3.0 percent pace reported last
month. Compensation was up 3.6 percent compared to the third
quarter of 2014.
((Reporting by Lucia Mutikani; Editing by Andrea Ricci))
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