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Nonfarm productivity increased by 0.7 per cent during the fourth quarter while unit labour costs surged 1.2 per cent, the Bureau of labour Statistics announced this morning. Analysts polled by Bloomberg forecast fourth quarter productivity increasing 0.8% in the fourth quarter, with unit labour costs growing at the same rate.
Increased productivity came as hours worked grew at a seasonally adjusted annual rate of 2.9 per cent.
For the full year, productivity increased by 0.5 per cent on output gains of 2.3 per cent and a 1.8 per cent longer work week.
However, real compensation per hour declined across all sectors when adjusted for changes to CPI. That measurement showed some sign of rebound during the fourth quarter, when it reversed a 3.5 per cent contraction in the business sector and grew by 1.1 per cent.
Manufacturing real wages per hour showed some resurgence during the final quarter as well, moving 0.3 per cent higher off of a 6.0 and 3.5 per cent contraction during the second and third periods, respectively.
“In the manufacturing sector, productivity grew 2.8 per cent in 2011, reflecting a 4.9 per cent increase in output combined with a 2.0 per cent increase in hours; this is the largest annual increase in manufacturing sector hours since a 2.3 per cent gain in 1994,” the BLS said in a statement. “Unit labour costs in the manufacturing sector fell 1.3 per cent in 2011.”