U.S. productivity increases 3.1% in third quarter
U.S. productivity increases 3.1% in third quarter (by Jeffry Bartash)
WASHINGTON (MarketWatch) - The productivity of U.S. businesses climbed 3.1% in the third quarter as workers produced more goods and services in nearly the same amount of time, according to the Labor Department. Economists surveyed by MarketWatch had expected productivity to increase by 3.7% in the third quarter. Output climbed 3.8%, the fastest rate since the second quarter of 2010, while hours worked rose a much smaller 0.6%. As a result, unit-labor costs fell 2.4%, the biggest drop in six quarters. In the second quarter, meanwhile, productivity was revised up to show a 0.1% decline compared to a previously stated 0.7% decrease. Although hourly wages rose 0.6% in the third quarter, higher inflation more than offset the increase. Inflation-adjusted wages fell 2.4%. In the past 12 months, productivity has risen at a 1.1% rate. Higher productivity is widely regarded as the key to a rising standard of living because it tends to lead to higher pay for workers and larger profits for companies.