Productivity Slows in Fourth Quarter

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David Paul Morris/Bloomberg News

U.S. workers’ productivity rose in the fourth quarter at a slower rate than previously estimated, the Labor Department reported.

Productivity increased at a 1.8% annual rate from October to December, down from a previously estimated 3.2%, according to the Labor Department.

The increase in productivity reflects gains of 3.4% in output and 1.6% in hours worked.

Full-year productivity increased 0.5%, continuing a weak trend seen over the past three years, but analysts forecast a rebound this year due to stronger economic growth, the Associated Press reported.



The 2013 rise in productivity follows a 1.5% increase in 2012.

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.