The productivity of workers in the United States dropped more than the forecast in the fourth quarter as the economy contracted. It led to the increase in labor expenses and indicated that companies were reaching the limit of how much efficiency they can get out of their employees.
The measure of employee output per hour went down at a 2 percent annual rate, which is the worst performance in almost two years. It came after the 3.2 percent gain in the previous three months according to the report released by the Labor Department. The average forecast in a poll made by Bloomberg involving 63 economists called for a 1.4 percent decline. The costs for every worker increased at a 4.5 percent rate, which was more than the estimate.
Companies increased their hiring toward the end of 2012. It was an indication that they were struggling to make do with the existing staff as sales improve. The gains in consumer and business spending in the last quarter helped improve the job market in 2013.
According to a Bloomberg survey, economists’ estimates ranged from a drop of 3.5 percent to an increase of 0.3 percent. Productivity in the third quarter was changed from an initially reported 2.9 percent increase.
First-time claims for unemployment insurance payments dropped last week. It returned to the levels reached in the second half of 2012 according to the report released by the Labor Department. Applications for jobless benefits fell 5,000 to 366,000 in the week that ended February 2. Economists predicted 360,000 for the period according to the average of 53 estimates in a Bloomberg poll.
Stock index futures increased after the release of the reports. The contract on the Standard & Poor’s 500-index maturing in March went up 0.1 percent to 1,508.3.
Productivity increased 1 percent in 2012 after a 0.7 percent gain in the previous year. The gain was less than half the 2.3 percent average from 2000 to 2011.