Economic Buzz: Steep Fall In Labor Productivity In US

6 May 2022 , 08:44 AM

Labor productivity in the U.S. showed a substantial pullback in the first quarter of 2022, according to a report released by the Labor Department. Labor productivity plunged by 7.5 percent in the first quarter, reflecting the largest decline since the third quarter of 1947. The sharper than expected pullback in productivity, a measure of output per hour, came as output slumped by 2.4 percent and hours worked jumped by 5.5 percent. Meanwhile, the report showed unit labor costs soared by 11.6 percent in the first quarter after climbing by a revised 1.0 percent in the fourth quarter. The sharp increase in unit labor costs reflected the steep drop in productivity as well as a 3.2 percent jump in hourly compensation. However, the report showed real hourly compensation, which takes changes in consumer prices into account, tumbled by 5.5 percent in the first quarter after falling by 0.5 percent in the fourth quarter. The Labor Department said unit labor costs surged 7.2 percent over the last four quarters, reflecting the biggest increase in this measure since the third quarter of 1982.Powered by Commodity Insights