US worker productivity strong in Q4
US WORKER productivity grew faster than expected in the fourth quarter, keeping unit labour costs contained and giving the Federal Reserve another boost in the fight against inflation.
Non-farm productivity, which measures hourly output per worker, increased at a 3.2 per cent annualised rate last quarter, the Labor Department’s Bureau of Labor Statistics said on Thursday (Feb 1).
Data for the third quarter was revised lower to show productivity growing at a still-solid 4.9 per cent rate, instead of the previously reported 5.2 per cent. Economists polled by Reuters had forecast productivity increasing at a 2.5 per cent rate.
Unit labour costs – the price of labour per single unit of output – rebounded at a 0.5 per cent rate after declining at a 1.1 per cent pace in the July-September quarter.
The report followed news on Wednesday that compensation costs rose in the fourth quarter at the slowest pace since 2021.
The US central bank left interest rates unchanged on Wednesday. Fed Chair Jerome Powell told reporters that “we believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialling back policy restraint at some point this year.”
The Fed has raised its policy rate by 525 basis points to the current 5.25 per cent-5.50 per cent range since March 2022.
The labour market is also steadily easing, which could further help to curb wage inflation. REUTERS
Share with us your feedback on BT's products and services
