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Productivity takes huge hit amid soaring inflation, surging labor costs
By Prathapan Bhaskaran - May 05, 2022, 06:37 PM ET
Last Updated - Feb 27, 2024, 07:12 AM EST
Labor costs surged as the United States struggled with soaring Covid cases, according to the report. Worker productivity, a measure of output against hours worked, slid the sharpest in about 75 years in the first three months of the year, the report said. Fall is worst since the third quarter of 1947
to 7.2%
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The U.S. nonfarm productivity declined 7.5% from January through March, the Bureau of Labor Statistics reported Thursday.
Labor costs surged as the United States struggled with
soaring Covid cases, according to the report. Worker productivity, a measure of output against hours
worked, slid the sharpest in about 75 years in the first three months of the
year, the report said. Fall is worst since the third quarter of 1947.
The unit labor costs soared 11.6%, taking the increase over
the last four quarters to 7.2%, the steepest rise since the third quarter of 1982.
The unit cost is a calculation of how much employers pay workers in salary and
benefits per unit of output.
Biggest fall since 1993
The data beat the Wall Street expectation of a 5.2% drop in
productivity and 10.5% rise in unit costs, a CNBC report suggests. Productivity
fell 0.6% on a four-quarter basis marking the biggest fall since the fourth
quarter of 1993.
The numbers are believed to underline theinflation surge in the U.S., which has seen prices rise at the fastest level in
more than 40 years, media reports say. Federal Reserve officials have identified
reining in the inflation as their priority and raised interest rates half a
percentage point.
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