U.S. nonfarm productivity increased at a 6.9% annual rate in the fourth quarter, revised higher from a 6.2% increase reported last month, the Labor Department reported yesterday.

Productivity in the third quarter was revised to a 7.8% gain from the previously reported 7.2% rise. For all of 2009, productivity increased 5.8%.

Unit labor costs fell 5.9%, compared to the 4.4% drop reported in the preliminary data and a 7.6% decline in the third quarter. Unit labor costs record the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to raise unit labor costs and increases in output per hour tend to reduce them.

Economists polled by Thomson Reuters expected productivity to be revised to a 6.2% increase and for unit labor costs to be revised to a 4.4% decline.

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