Low rate mirrors economy's slow pace
WASHINGTON (Reuters) — The U.S. government on Thursday sharply revised down nonfarm productivity for the fourth quarter, mirroring the economy's slow growth pace in the same period.
Productivity rose at a 1.8 per cent annual rate instead of the previously reported 3.2 per cent pace, the Labor Department said on Thursday. Productivity, which measures hourly output per worker increased at a 3.5 per cent pace in the third quarter.
Economists polled by Reuters had expected fourth-quarter productivity would be revised down to a 2.5 per cent rate.
The government last week cut its estimate of fourth-quarter gross domestic product growth to an annual pace of 2.4 per cent from the previously estimated 3.2 per cent rate.
Underscoring the weak trend, productivity increased 1.3 per cent compared to the same period in 2012. It was previously reported to have increased 1.7 per cent.
For all of 2013, productivity increased 0.5 per cent rather than 0.6 per cent. That was the smallest gain since 1993 and compared to a 1.5 per cent rise in 2012.
Unit labour costs — a gauge of the labour-related cost for any given unit of output — fell at a revised 0.1 per cent rate in the fourth quarter, still showing weak wage-related inflation pressures in the economy. They had previously been reported to have dropped at a 1.6 per cent rate.
Economists polled by Reuters had expected the drop in unit labour costs would be revised to a 0.9 per cent rate.
Unit labour costs declined at a revised 2.1 per cent rate in the third quarter. They were down 0.9 per cent from the year-earlier period and were up 1.1 per cent in 2013, the weakest reading since 2010.