WASHINGTON – 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 today.
Output increased 4.0% and hours worked decreased 5.0% in the quarter ending Sept. 30. Manufacturing productivity jumped a record 13.9%.
Employers have been shedding workers and cutting hours amid the longest economic recession since WWII. 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 productivity outpaced the increase in hourly compensation. Unit labor costs declined 3.6% in the last 12 months, the largest annual decrease since the series began in 1948. Unit labor costs record the ratio of hourly compensation to labor productivity.
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 higher to a 6.9% annual pace of growth from 6.6%, while unit labor costs were revised lower to minus-6.1% from the minus-5.9% reported.
