Blomberg is reporting that the productivity of U.S. workers from October through December declined by the most since the third quarter of 2000, and labor costs accelerated, adding to concerns that rising wages and benefits may fuel inflation.
The Labor Department stated that productivity fell at a 0.6 percent annual rate in the fourth quarter after a 4.5 percent gain the previous three months. Labor costs jumped at a 3.5 percent pace, the most in a year.
Economists stated that the productivity slowdown reflects the weakest quarter for growth in three years and fewer opportunities for companies to extract more from their workforces. Those efficiency gains have helped keep a lid on inflation during the current expansion.
In a separate report, the Labor Department showed that the number of people receiving unemployment benefits fell to the lowest level in almost five years. Continuing claims declined by 64,000 in the week ended Jan. 21 to 2.509 million.