Worker productivity posts biggest quarterly decline since 1947 as unit labor costs soar
Analysts polled by Refinitiv were expecting a 5.4% decline in productivity and a 9.9% rise in labor costs
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U.S. labor productivity plunged 7.5% during the first quarter of 2022, according to new data released Thursday by the U.S. Bureau of Labor Statistics. The figure marks the largest quarterly decline since 1947, when labor productivity fell 11.7%, and a 0.6% decline compared to a year ago.
Meanwhile, unit labor costs, or how much employers pay workers in salary and benefits per unit of output, jumped 11.6% during the first quarter, a 7.2% increase over the past four quarters and the biggest gain since the third quarter of 1982.
Analysts polled by Refinitiv were expecting a 5.4% decline in productivity and a 9.9% rise in labor costs.
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Output decreased 2.5% during the quarter, compared to 4.2% a year ago, while hours worked increased 5.5% and hourly compensation increased 3.%, compared to 4.8% and 6.5% a year ago, respectively.
U.S. labor productivity plunged 7.5% during the first quarter of 2022, the largest quarterly decline since 1947, when labor productivity fell 11.7%. (iStock / iStock)
In addition to the latest figures, labor productivity for the fourth quarter was revised slightly lower to a growth rate of 6.3%, compared to the originally reported 6.6%.
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The number of job openings climbed to 11.5 million in March as 4.5 million Americans, or about 3% of the workforce, quit their jobs.
For the week ending April 30, the number of Americans filing for unemployment unexpectedly rose to 200,000 from an upwardly revised 181,000 a week earlier. Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to 1.38 million, a decrease of 19,000 from the previous week.
The latest data comes as inflation has soared to a record 40-year high, exacerbated by ongoing supply chain issues, the COVID-19 pandemic and Russia's invasion of Ukraine. On Wednesday, the Federal Reserve raised interest rates by half a percentage point, the biggest hike in two decades, as part of an effort to start bringing inflation down.
U.S. gross domestic product, the broadest measure of goods and services produced across the economy, shrank by 1.4% in the first quarter, the worst level since 2020.
Fox Business' Megan Henney contributed to this report