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US productivity in third quarter fastest in two years
[WASHINGTON] US worker productivity rebounded sharply in the third quarter as initially estimated, marking its quickest pace of growth in two years, but the trend remained weak.
The Labor Department said on Tuesday that nonfarm productivity, which measures hourly output per worker, rose at an unrevised 3.1 per cent annual rate.
The increase ended three straight quarters of decline. Productivity fell at a 0.2 per cent rate in the second quarter and was unchanged compared to the third quarter of 2015.
Economists had expected that productivity would revised up to a 3.3 per cent rate in the third quarter. That expectation was based on data last week showing gross domestic product increased faster than previously reported in the third quarter.
The government revised GDP data to show the economy growing at a 3.2 per cent pace in the third quarter instead of the 2.9 per cent rate it had previously reported.
Output per worker in the third quarter jumped at a 3.6 per cent rate, also the fastest pace since the third quarter of 2014. It was previously reported to have increased at a 3.4 per cent pace. The increase marked an acceleration from the second quarter's 1.6 per cent pace.
The increase in output came despite total hours worked rising only at a 0.5 per cent rate in the third quarter, slowing from a 1.7 per cent pace of increase in the second quarter. That reflected a drop in hours for the self-employed.
Unit labour costs, the price of labour per single unit of output, rose at an upwardly revised 0.7 per cent pace in the third quarter. They were previously reported to have increased at a 0.3 per cent rate.
Unit labour costs rose at a three per cent rate compared to the same period of 2015. That was up from the 2.3 per cent pace reported last month.
Hourly compensation per hour increased at a 3.8 per cent rate in the third quarter rather than the 3.4 per cent pace reported in November. Hourly compensation rose at a three per cent rate from a year ago. That was up from the 2.3 per cent pace estimated last month.