WASHINGTON -- The U.S. Labor Department said Thursday productivity of U.S. workers grew at the slowest pace in nearly two years during the third quarter.
Labor said non-farm business productivity grew at a seasonally adjusted annual rate of 1.9 percent during the third quater, the lowest rate since the fourth quarter of 2002. In year-on-year terms, the increase was 3.1 percent, the lowest rate since the first quarter of 2003.
Wall Street economists had expected a 1.5 percent increase in the third quarter.
Labor said the growth of workers' output slowed despite a sharp acceleration in the growth of workers' hours. For non-farm workers, output grew 4.1 percent in the third quarter after a 4.2 percent increase in the second quarter. But workers' hours rose 2.1 percent, the biggest increase in five years.
The productivity slowdown caused labor costs to grow at a faster clip. Unit labor costs rose 1.6 percent, up from a 1 percent increase in the second quarter, Labor said. Adjusted for inflation, hourly compensation was up 1.7 percent, well above the 0.2 percent gain recorded in the second quarter.
