Productivity Rises in Fourth-Quarter, Year

U.S. workers’ productivity rose at a 2.6% annual rate in the fourth quarter, matching an earlier estimate, the Labor Department said Thursday.

The level followed a 2.3% gain in the third quarter, which was lower than the 2.4% previously reported.

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

The reading was within the range of economists’ forecasts, Bloomberg reported.

For the year, productivity rose 3.9%, the biggest increase since 2002.

Labor costs fell 0.6% for the quarter and declined for a second straight year, declining 1.5%.

Among manufacturers, productivity rose 5.9% in the quarter, up from an originally reported 5.8%. Third-quarter productivity had risen 1.3%.

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.