WASHINGTON — U.S. nonfarm unit labor costs rose at a 2.1% annual rate of growth in the fourth quarter, below the 3.7% rise expected, but following declines in the previous two quarters, the Bureau of Labor Statistics reported yesterday.
Unit labor costs fell a revised 1.9% in the third quarter and fell 1.1% in the second quarter.
Productivity growth rose at a faster-than-expected 1.8% annual rate in the fourth quarter, a sharp deceleration from the 6.0% rise in the third quarter. Output growth slowed to a 0.4% annual rate of growth from the 5.6% rate in the third quarter. At the same time, hours worked fell 1.5% at an annual rate in the quarter, a faster rate of decline than the 0.3% drop in the third quarter.
The BLS said that the data does not include the benchmark revisions to the employment data released on Feb. 1. That data will be incorporated in the revised productivity data for the fourth quarter released on March 5.
Year-over-year growth in unit labor costs slowed dramatically in the quarter, rising only 1.0% from the fourth quarter of 2006, compared with a 3.0% year-over-year rise in the third quarter. Fourth-quarter productivity was up 2.6% year over year, the same as in the previous quarter.
For 2007 as a whole, unit labor costs rose 3.1% compared with the 2.9% rise in 2006. Nonfarm productivity was up 1.6% in 2007, a faster pace than the 1.0% rise in 2006.
— Market News International