Nonfarm productivity declined at a 1.8% annual rate last quarter and was unchanged y/y. The figure followed an upwardly revised 3.7% increase in Q3. For all of last year, worker productivity rose 0.8% on average, about the same as it did in the prior two years. Real output increased at a 3.2% rate last quarter (3.1% y/y) while hours worked gained 5.1% (3.1% y/y). Compensation per hour increased a diminished 0.9% (1.9% y/y) but when adjusted for lower prices, it improved 2.1% (0.7% y/y). The deterioration in productivity caused unit labor costs to jump 2.7% in Q4 (1.9% y/y), reversing it Q3 gain. The Q4 productivity decline compared to expectations for a 0.8% rise in the Action Economics Forecast Survey. A 1.0% rise in unit labor costs was expected.

Manufacturing sector worker productivity rose at a lessened 1.3% rate (2.8% y/y) after a 3.2% rise. For all of last year, productivity grew 2.5% on average after a 2.0% rise in 2013. Output grew 5.7% (4.8% y/y) after a 4.8% gain, while hours worked improved 4.3% (1.9% y/y) following a 1.5% Q3 increase. Worker compensation per hour increased at a steady 1.5% rate (2.4% y/y). Adjusted for price inflation, compensation gained 2.8% (1.2% y/y). Unit labor costs improved 0.2% (-0.4% y/y) following two quarters of sharp decline.

The productivity & cost figures are available in Haver's USECON database. The expectations figure is from Action Economics and is the AS1REPNA database.