Labor productivity in the nonfarm business sector rose 2.6% (AR) and roughly repeated its Q3 increase. The rise exceeded Consensus expectations for a 2.0% increase. Nevertheless, y/y growth decelerated to 1.7% following its upward surge following the recession. For the full year, productivity rose 3.6% and roughly repeated the 2009 increase. Last quarter's rise in productivity reflected a 4.5% quarterly gain (3.7% y/y) in output which was improved from the 3.8% Q3 rise. The gain in hours held roughly steady at 1.8% (2.0% y/y).

As the improvement in productivity outpaced a 1.9% gain in compensation, after two quarters of strength, unit labor costs ticked down 0.6%; a 0.3% increase had been expected. The decline from last year amounted to 0.2%. For the full year costs fell 1.5%, roughly the same as in 2009. 

The factory sector's productivity rose 5.8% after a 1.4% Q3 rise. Real output gained 3.7% (6.4% y/y) while hours worked fell 2.0% (+2.7% y/y). The productivity gain lowered unit labor costs by 2.9% and by 3.0% y/y as compensation rose 2.8% (0.5% y/y).

The productivity & cost figures are available in Haver's USECON database.