Worker productivity dropped to start the current year at its fastest pace in almost 75 years as labor costs jumped as the US struggled with rising Covid cases.
- Nonfarm productivity, a gauge of output against hours worker, fell 7.5% from January through March, the most significant decline since Q3 of 1947.
- Manufacturing sector labor productivity rose 0.7% in Q1 of 2022, as output rose 5.75, and hours worked increased by 5.1%.
- Manufacturing sector output came in at 3.3% above its level in Q4 of 2019. Hours worked in the manufacturing sector remained 1.0% below the Q4 of 2019 level.
- Unit labor costs also jumped 11.6%, bringing the increase in the last four quarters to 7.2%, the biggest increase since Q3 of 1982. On a four-quarter basis, productivity dropped 0.6%, the biggest fall since Q4 of 1993.
The productivity data shows a quarter whereby a variety of factors converged to cause a 1.4% fall in the rate of economic growth.
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Source: US Bureau of Labor Statistics
