Fourth-Quarter Productivity Declines

U.S. workers’ fourth-quarter productivity declined as the economy slowed, the Labor Department said Thursday.

The 2% downturn was the worst reading in almost two years and followed a 3.2% third-quarter gain.

Productivity is a measure of how much an employee produces for every hour of work.

Economists had forecast a 1.4% drop, Bloomberg News reported.

Expenses per worker rose at a 4.5% rate, more than forecast, Bloomberg said.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.