The numbers: The productivity of American workers rose by a revised 0.8% annual rate in the third quarter, the government said Wednesday after updating its initial report.
The increase was originally put at 0.3%.
Key details: Output, or the amount of goods and services produced, was somewhat stronger than previously reported. The increase was raised to 3.3% from 2.8%.
Hours worked was revised up a tick to show a 2.5% annual rate of growth.
Unit-labor costs climbed by a smaller 2.4% annual pace in the third quarter, compared to the preliminary 3.5% increase.
Over the past year unit-labor costs have risen a sharp 5.3%, reflecting a tight labor market in which companies have had to pay higher wages to attract and retain employees.
Yet because of high inflation, workers aren’t really benefiting from more pay. Inflation-adjusted hourly compensation fell at a 2.3% rate in the third quarter.
Big picture: Productivity has been weak for years and the pandemic didn’t help.
That’s a bad thing for the economy. Rising productivity tends to result in higher business profits, rising wages and a better standard of living.
Slower productivity growth constrains the economy and limits growth.
Economists don’t expect productivity to improve much in the next few years.