U.S. workers were not as productive in the third-quarter as originally believed, according to revised government data.
The increase in productivity was revised down to 2.3% from an initial reading of 3.1%, the Labor Department said Wednesday. The combination of slower output in goods and services and more hours worked accounted for the downward revision.
n its second and final report on third-quarter productivity, the government said inflation-adjusted output rose 3.2% instead of 3.8% as originally estimated.
That was still the fastest pace since the fourth quarter of 2010, however. Productivity fell in the first six months of this year.
Hours worked, meanwhile, rose 0.8% last quarter instead of an initial reading of 0.6%. That also contributed to lower productivity growth.
Unit-labor costs, which posted the biggest decline in a year and a half, were little changed. The government said they fell 2.5% instead of 2.4% as initially reported.
Economists were expecting unit-labor costs to be revised to a decline of 2.3%.
Unit-labor costs reflect how much it costs a business to produce one unit of output, such as a bushel of wheat or a ton or coal. In the past 12 months, unit-labor costs have risen a scant 0.4%.
Despite higher productivity workers haven’t actually increased their standard of living as would typically be the case. Wages adjusted for inflation fell 3.2% in the third quarter, reflecting higher prices for gas, food and many other consumer items.
The decline in real wages was initially reported as 2.4%.
Higher productivity is usually the linchpin of a strong economy. When workers produce more, companies earn higher profits and they can pay higher wages.
Yet sometimes productivity rises when companies buy more labor-saving devices or reduce staff while producing the same amount of goods and services. And even if higher productivity translates into higher wages, the gains for workers could be offset by higher inflation.
In the past 12 months productivity has risen at a 0.9% rate.
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