WASHINGTON, Jan 8 (Reuters) - U.S. worker productivity grew at its fastest pace in two years in the third quarter as businesses invested heavily in artificial intelligence, depressing labor costs.
Nonfarm productivity, which measures hourly output per worker, accelerated at a 4.9% annualized rate, the Labor Department's Bureau of Labor Statistics said on Thursday.
That was the quickest pace since the third quarter of 2023 and followed an upwardly revised 4.1% growth rate in the second quarter. Economists polled by Reuters had forecast productivity would grow at a 3.0% rate after a previously reported 3.3% pace of expansion in the April-June quarter.
The report was delayed by the 43-day federal government shutdown.
Productivity grew at a 1.9% rate from a year ago. Businesses are spending on AI, which economists said could further boost productivity. The jump in productivity helps to explain the gap between strong gross domestic product growth and a lackluster labor market. The economy grew at a robust 4.3% rate in the third quarter. In contrast, private job gains averaged 55,000 per month in the three months through October.
Unit labor costs - the price of labor per single unit of output - decreased at a 1.9% rate in the third quarter. That followed a 2.9% pace of decline in the April-June quarter. Labor costs increased at a 1.2% rate from a year ago.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
Source: Reuters