WASHINGTON (Reuters) – U.S. worker productivity grew a bit faster than initially thought in the fourth quarter, helping to curb labor costs and providing a boost in the fight against inflation.
Nonfarm productivity, which measures hourly output per worker, increased at a 1.5% annualized rate last quarter, the Labor Department’s Bureau of Labor Statistics said on Thursday. That was revised higher from the previously estimated 1.2% pace.
Economists polled by Reuters had expected productivity would be unrevised at a 1.2% pace. Productivity increased at a 2.0% rate from a year ago, up from the previously estimated 1.6% pace. It grew 2.7% in 2024, revised up by 0.4 percentage point. Productivity increased 1.8% in 2023, an upward revision to the previously reported 1.6%.
Productivity data for the third and fourth quarters as well as the annual average for 2024 were revised to incorporate regular updates of source data on output and compensation.
Unit labor costs – the price of labor per single unit of output – increased at a 2.2% rate in the October-December quarter, revised down from the previously estimated 3.0% pace. That followed a 1.5% pace of decline in the third quarter.
Labor costs increased at a 2.0% rate from a year ago. They were previously reported to have advanced at a 2.7% pace.
The upward revision to productivity and downgrades to labor costs are likely to be welcomed by policymakers working to bring inflation back to the Federal Reserve’s 2% target.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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