Productivity Jumps at Fastest Pace Since 2020 as Output Rises and Labor Costs Drop
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Productivity of American workers rose by a revised 5.2% annual rate in Q3 2022, the fastest pace since Q3 2020. Excluding the pandemic era, it's the fastest since Q4 2009.
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Over the past year, productivity has increased by a revised 2.4% following a 1.2% gain in Q2. First two straight quarters of productivity growth since early 2021.
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Output rose 6.1% annually in Q3, faster than the preliminary estimate of 5.9%. Hours worked revised down slightly to 0.9% annual growth from 1.1%.
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Unit labor costs dropped by a larger 1.2% annual pace in Q3, compared to the preliminary 0.8% decrease. Over the past year, unit labor costs rose 1.5%.
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Some economists argue we're in a new surge in productivity growth, which could help contain wages and inflation without sharp unemployment increases. Others say it's too soon to know if the trend is sustainable.