US fourth quarter productivity revised to a decline of 4.2%

U.S. productivity fell at an annual rate of 4.2% in the fourth quarter, a sharp decline but not as large as first estimated.

That revised figure released by the Labor Department Thursday was slightly smaller than the 4.7% decline estimated a month ago.

Labor costs rose at a 6% rate in the fourth quarter, slightly lower than the 6.8% first estimated.

Productivity is the amount of output per hour of work. The revisions reflected the fact that the government revised its estimate of the performance of the gross domestic product, the country’s total output of goods and services, to show an increase of 4.1% at an annual rate in the fourth quarter slightly higher than its initial estimate of 4% growth.

For all of 2020, productivity rose 2.5%, up from an annual gain of 1.8% in 2019. In recent years, productivity growth has been exceptionally weak and economists are uncertain about the cause.

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