American worker productivity drops most since 2015 as labor costs shrink

WASHINGTON — U.S. worker productivity fell by the most in nearly four years in the third quarter, the government confirmed, while growth in unit labor costs was not as robust as initially thought.

The Labor Department said on Tuesday nonfarm productivity, which measures hourly output per worker, decreased at a 0.2% annualized rate in the last quarter, the biggest drop since the fourth quarter of 2015.

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Productivity was previously reported to have decreased at a 0.3% pace in the July-September quarter. A rebound in hours, driven by a surge in the volatile self-employed and unpaid family workers component, outpaced output in the third quarter.

Productivity grew at an unrevised 2.5% rate in the second quarter. Economists polled by Reuters had expected third-quarter productivity would be revised up to show it falling at a 0.1% rate.

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The government last month revised up third-quarter gross domestic product growth to a 2.1% rate from a 1.9% pace.