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U.S. Productivity Unexpectedly Posts First Drop Since 2015

  • Third-quarter decline of 0.3% reflects hours outpacing output
  • Unit labor costs rose 3.6%, exceeding estimates for 2.2%
Updated on

Productivity in the U.S. unexpectedly posted the first decline in almost four years and labor costs accelerated, suggesting a pickup in efficiency earlier this year was more of a temporary shift.

Nonfarm business employee output per hour decreased at a 0.3% annualized rate in the third quarter, according to Labor Department figures Wednesday. That compared with the median projection for a 0.9% increase in Bloomberg’s survey of economists and followed an upwardly revised 2.5% gain in the second quarter. Unit labor costs rose at a 3.6% rate following 2.4% in the prior period.