Productivity Rebound Signals Faster Growth and Easing Inflation Pressures
• Productivity rose 2.7% in Q4 2022 vs a year earlier, signaling potential faster economic growth and slowing inflation • Productivity increased 3.3% in Q4 after jumping 4.9% in Q3, reversing a declining 2022 trend • Higher productivity allows businesses to earn bigger profits and pay workers more, while reducing inflation • Output rose sharply by 3.7% annually in Q4; hours worked only mildly by 0.4% • Unit labor costs increased just 0.5% in Q4 and 2.3% in the past year, after surging 5.6% in 2022 amid high inflation