Friday, 10 Apr 2020

U.S. Productivity Growth Slows

Washington, U.S. worker productivity slowed in the third quarter but remained above the weak gains seen over the past decade, and labor costs accelerated but remained at a low level, the government reported Thursday.

The Labor Department said non-farm productivity�the hourly output per worker�increased at a 2.2 percent annual rate in the July-September quarter. Productivity surged at a 3 percent pace in the second quarter, which was the strongest since the first quarter of 2015. Compared to the third quarter of 2017, productivity increased at a 1.3 percent rate.

Hourly compensation jumped at a 3.5 percent annual rate in the third quarter after increasing at a 1.9 percent pace in the April-June period. Compared to the third quarter of 2017, hourly compensation increased at a 2.8 percent rate.

The rise in compensation mirrors a solid gain in employment costs in the third quarter. The department reported Wednesday that annual wage growth recorded its biggest increase in 10 years in the July-September period.

The slowdown in third-quarter productivity is in line with a moderation in gross domestic product (GDP) growth for that period. The economy grew at a 3.5 percent annual rate in the July-September period after a strong 4.2 percent pace in the second quarter.

Productivity has been weak throughout the current recovery from the 2007-2009 Great Recession. Productivity rose only 1.1 percent in 2017. Over the past decade, it has gained at an average annual rate of 1.3 percent, just about half the 2.1 percent annual advances seen in the seven decades starting in 1947. Economists have been unable to produce the definitive reasons for the slowdown.

Source: Saudi Press Agency

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