U.S. labor productivity increases less than initially estimated in the fourth quarter

The revised data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States increased 1.2 percent q-o-q in the fourth quarter of 2019, as output advanced 2.4 percent q-o-q and hours worked rose 1.2 percent q-o-q (seasonally adjusted). That was below initial estimate of a gain of 1.4 percent q-o-q and economists' forecast for an advance of 1.4 percent q-o-q. In the third quarter, labor productivity fell 0.3 percent q-o-q (revised from the originally estimated -0.2 percent q-o-q).

In y-o-y terms, the labor productivity rose 1.8 percent in the fourth quarter, reflecting a 2.6-percent jump in output and a 0.8-percent advance in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the fourth quarter rose 0.9 percent q-o-q compared to an initial estimate of a 1.4 percent q-o-q advance and a 0.2 percent q-o-q gain in the prior quarter (revised sharply from the originally reported 2.5 percent).

Economists had forecast a 1.4 percent q-o-q boost in fourth-quarter unit labor costs.

Unit labor costs quarterly increase reflected a 2.1-percent q-o-q growth in compensation per hour and a 1.2-percent q-o-q advance in productivity.

Compared to the corresponding period of 2018, unit labor costs rose 1.7 percent.

In 2019, U.S. nonfarm business sector productivity grew 1.9 percent (the largest annual increase since 2010), while unit labor costs increased 1.7 percent.