Fourth-Quarter Productivity Rises 3.2%

Fourth-quarter U.S. worker productivity increased at a 3.2% annual rate, the Labor Department said Thursday.

Economists had forecast a 1.5% increase, Bloomberg reported. Productivity is a measure of how much an employee produces for every hour of work.

Labor costs rose at a rate of 1.8%, less than the 3.6% increase forecast by economists, 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.