WASHINGTON (Reuters) - U.S. nonfarm productivity rose more than expected in the fourth quarter, mirroring the economy’s sturdy growth pace, but weak unit labor costs pointed to subdued wage inflation.
Productivity rose at a 3.2 percent annual rate after increasing at a 3.6 percent pace in the third quarter, the Labor Department said on Thursday.
Economists polled by Reuters had forecast productivity, which measures hourly output per worker, rising at a 2.5 percent rate in the last three months of 2013.
Still, the underlying trend remained soft, with productivity increasing 1.7 percent compared to the same period in 2012. For all of 2013, productivity increased 0.6 percent. That was the smallest gain since 2011 and compared to a 1.5 percent rise in 2012.
Unit labor costs - a gauge of the labor-related cost for any given unit of output - fell at a 1.6 percent rate in the fourth quarter, showing weak wage-related inflation pressures in the economy. Unit labor costs fell at a 2.0 percent rate in the third quarter.
Economists polled by Reuters had expected unit labor costs to fall at a 0.5 percent pace in the fourth quarter. Labor costs were down 1.3 percent from the year-earlier period.
They were up 1.0 percent in 2013, the weakest reading since 2010.
Reporting by Lucia Mutikani; Editing by Andrea Ricci