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The
Labor Department said on Thursday nonfarm productivity, which
measures hourly output per worker, dropped at a 4.8% annualized
rate last quarter. That was the deepest pace of contraction
since the second quarter of 1981.
Data for the third quarter was revised higher to show
productivity growing at a 5.1% pace instead of the previously
reported 4.6% rate. Productivity rose 2.6% in 2020 compared to
1.7% in 2019.
Economists polled by Reuters had forecast productivity declining
at a 2.8% rate in the fourth quarter. Compared to the fourth
quarter of 2019, productivity increased at a 2.5% rate.
The coronavirus pandemic has decimated lower-wage industries,
like leisure and hospitality, which economists say tend to be
less productive.
Hours worked rose at a 10.7% rate last quarter. That followed a
37.1% pace in the third quarter.
Unit labor costs - the price of labor per single unit of output
- rebounded at a 6.8% rate after plunging at a 7.0% rate in the
third quarter. Unit labor costs increased at a 5.2% rate from a
year ago. They rose 4.3% in 2020 after gaining 1.9% in 2019.
Though labor costs have been distorted by the pandemic's
disproportionate impact on lower-wage industries, the rebound
supports expectations of higher inflation this year.
Hourly compensation increased at a 1.7% rate last quarter. That
followed a 2.2% pace of decline in the July-September quarter.
Compensation increased at a 7.8% rate compared to the fourth
quarter of 2019. It grew 7.0% in 2020 after rising 3.6% in 2019.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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