Fourth-Quarter Productivity Revised Upward

U.S. workers’ productivity increased in the fourth quarter and labor costs climbed, the Labor Department said Wednesday, raising an earlier productivity estimate.

The 0.9% gain in productivity, which was revised from an earlier 0.7% estimate, followed a 1.8% gain the previous three months.

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

Economists had forecast a 0.8% increase, Bloomberg reported.

Labor costs jumped 2.8%, more than the 1.2% 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.