Q4 productivity gains less than expected

Nonfarm business sector labor productivity increased 1.2 percent in the fourth quarter 

of 2019, the U.S. Bureau of Labor Statistics reported today, as output increased 2.4 

percent and hours worked increased 1.2 percent. (All quarterly percent changes in this 

release are seasonally adjusted annual rates.) From the fourth quarter of 2018 to the 

fourth quarter of 2019, productivity increased 1.8 percent, reflecting a 2.6-percent 

increase in output and a 0.8-percent increase in hours worked. 

Labor productivity, or output per hour, is calculated by dividing an index of real output

by an index of hours worked by all persons, including employees, proprietors, and unpaid 

family workers. 

Unit labor costs in the nonfarm business sector increased 0.9 percent in the fourth 

quarter of 2019 as hourly compensation grew at a faster rate (2.1 percent) than 

productivity (1.2 percent). Unit labor costs increased 1.7 percent over the last four 

quarters.