U.S. Worker Productivity Climbs at 6.2% Rate

U.S. workers’ productivity surged in the fourth quarter to an annual rate of 6.2%, capping the largest one-year gain since 2003, the Labor Department said Thursday.

The rate followed an originally reported 8.1% rate in the third quarter, Labor said.

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

The level was slightly lower than economists’ forecasts of an 6.5% annual rate, Bloomberg reported.

Among manufacturers, productivity rose at a 7.8% rate.

Labor costs fell at a 4.4% rate.

For all of 2009, productivity increased 2.9%, the biggest gain in six years. Labor costs fell 0.9% during the year, the biggest drop in seven years.

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.