By Harriet Torry

U.S. labor productivity rose for the second consecutive quarter in the fourth quarter, although for the year as a whole productivity posted its biggest decline in nearly five decades.

U.S. nonfarm labor productivity--a measure of goods and services produced in the U.S. per hour worked-rose at a seasonally adjusted annual rate of 3% in the fourth quarter from the prior quarter, the Labor Department said Thursday.

Quarterly productivity figures are volatile. Annual average productivity declined 1.3% in 2022 - the biggest year-over-year decline since 1974. Productivity dropped in a year when economic output cooled but employers were rapidly restaffing after layoffs early in the pandemic.

Third-quarter productivity was revised higher, to a 1.4% increase from a previous estimate of 0.8%.

Unit labor costs, a measure of worker compensation and productivity, increased at a 1.1% pace in the fourth quarter from the prior quarter, the Labor Department said.

Annual average hourly compensation rose 4.4%, but adjusted for inflation compensation declined 3.4% in 2022 - a sign that price pressures are continuing to pinch workers' take-home pay packets.

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

February 02, 2023 09:23 ET (14:23 GMT)