The productivity of U.S. workers saw its biggest annual decline in 2022 in nearly five decades.
Nonfarm labor productivity—a measure that compares the output of goods and services to the number of hours worked—dropped 1.5 percent in the final three months of the year when compared with the year-earlier period. Apart from worse declines earlier in 2022, this was the biggest drop in four decades.
On average, productivity fell 1.3 percent in 2022, the biggest annual drop since 1974, when productivity fell 1.7 percent on average.
Compared with the prior quarter, however, productivity improved at a seasonally adjusted and annualized rate of three percent, exceeding Wall Street’s expectations for a 2.4 percent improvement. In the third quarter compared, productivity rose at a 1.4 percent annualized rate, upwardly revised from the preliminary estimate of 0.8 percent.
