The revised data from the U.S. Labour Department showed on Tuesday that nonfarm business sector labor productivity in the United States decreased 4.2 percent q-o-q in the fourth quarter of 2020, as output rose 5.5 percent q-o-q and hours worked surged 10.1 percent q-o-q (seasonally adjusted). That was better than the initial estimate of a drop of 4.8 percent q-o-q and economists’ forecast for a decline of 4.7 percent q-o-q. In the third quarter, labor productivity surged 4.2 percent q-o-q (revised from initially reported +4.6 percent q-o-q).

In y-o-y terms, the labor productivity increased 2.4 percent, reflecting a 2.6-percent fall in output and a 4.9-percent drop in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the fourth quarter rose 6.0 percent q-o-q compared to an initial estimate of a 6.8 percent q-o-q advance and a revised 9.7 percent q-o-q plunge in the prior quarter (originally a 7.0 percent q-o-q decrease). Economists had forecast a 6.6 percent q-o-q jump in fourth-quarter unit labor costs.

Unit labor costs quarterly gain reflected a 1.5-percent q-o-q climb in compensation and a 4.2-percent q-o-q fall in productivity.

Compared to the corresponding period of 2019, unit labor costs rose 4.2 percent.