Catherwood LibraryILR School

The efficiency of workers rose at a modest pace in the final three months of last year, far below the gain originally estimated, while worker wages and benefits soared. The Labor Department reported Tuesday that productivity, the amount of output per hour of work, rose at an annual rate of 1.6 percent in the October-December period last year, about half of the 3 percent increase the government initially estimated a month ago. The report showed that labor costs for each unit of output soared by 6.6 percent, far higher than the 1.7 percent increase initially reported. The combination of lower productivity and higher wages, if sustained, would raise alarm bells at the Federal Reserve about inflation.