WASHINGTON - U.S. nonfarm productivity increased 2.6% in the fourth quarter of 2010, unrevised from the initial estimate, while output and hours worked were revised lower, the Labor Department reported Thursday.
Unit labor costs, a ratio of hourly compensation to labor productivity, declined 0.6% for the quarter ending Dec. 31, also unrevised from last month's initial estimate.
Workers' output was revised lower to a 4.0% increase for the quarter, down from a 4.5% gain reported last month. Hours worked were also revised lower to a 1.4% increase for the quarter from 1.8% reported earlier.
Hourly compensation was revised slightly higher to a 2.0% increase from a 1.9% gain reported last month.
Economists expected the estimates from last month – a 2.6% increase in productivity and a 0.6% dip in unit labor – to hold, according to the median estimate from Thomson Reuters.
In the manufacturing sector, productivity increased 5.9% in the fourth quarter. Manufacturing unit labor costs slid 2.7% for the quarter.
An increase in hourly compensation tends to push higher business' labor costs, while an increase in output tends to reduce labor costs.
For the third quarter of 2010, which ended Sept 30, productivity increased 2.3%, revised down from an earlier estimate of a 2.4% increase. Third quarter unit labor costs were revised to a 0.1% increase from a 0.1% decrease.
In 2010, productivity increased 3.9%, the largest annual increase since 2002. Unit labor costs fell 1.5%, following a 1.9% decline in 2009.
