U.S. nonfarm unit productivity increased at a 9.5% annual rate in the third quarter, the largest gain in six years, the Labor Department reported yesterday.
Output increased 4.0% and hours worked decreased 5.0% in the quarter ending Sept. 30.
Manufacturing productivity increased a record 13.9%.
Employers have been shedding workers and cutting hours amid the longest economic recession since World War II.
Workers’ hours fell 7.5% in the 12 months ending in September, the largest decline since the series began in 1948.
Unit labor costs declined at a 5.2% annual rate in the third quarter as a result of productivity outpacing the increase in hourly compensation.
Unit labor costs declined 3.6% in the last 12 months, the largest annual decrease.
Economists polled by Thomson Reuters expected productivity to rise 6.2% and unit labor costs to decline 4.0% in the third quarter.
Productivity in the second quarter was revised to a 6.9% gain from 6.6%, while unit labor costs were revised to a 6.1% drop from a 5.9% decline.
