Input Stories

U.S. labor productivity increased in the final quarter of 2024 (Bloomberg, subscription).

What’s going on: “Productivity, or nonfarm employee output per hour, rose at a 1.2% annualized rate after a revised 2.3% increase in the July-to-September period, data from the Bureau of Labor Statistics showed Thursday. For all of last year, productivity increased 2.3%—the most in 14 years, excluding the pandemic surge in 2020.”

• Unit labor costs, or the amount businesses pay workers to produce a single unit of output, rose at a 3% rate, following a revised 0.5% increase in the prior reading.
• For all of 2024, unit labor costs advanced 2.6%—less than the increases from 2020 to 2022 but faster than in decades just prior to COVID-19.

More details: Output went up 2.3% in Q4, while hours worked increased 1%. Hourly wages grew 4.2%.

Related news: Another closely watched inflation measure out last week, the employment cost index, showed labor growth costs cooled in the fourth quarter, “reassuring Federal Reserve policymakers wage pressures are gradually diminishing and no longer a key driver of inflation” (Bloomberg, subscription).