WASHINGTON — American worker productivity experienced another slowdown during the opening months of 2024, though economists anticipate a turnaround as companies pour resources into artificial intelligence technology.
The Bureau of Labor Statistics reported Thursday that nonfarm productivity — which tracks output per worker each hour — rose at an annualized 0.8% during the first quarter. This figure fell short of the 1.0% growth rate that economists surveyed by Reuters had predicted.
The federal agency also adjusted its fourth-quarter figures downward, showing productivity had grown at 1.6% rather than the initially reported 1.8%. This represents a significant decline from the robust 5.2% jump recorded in the third quarter of last year.
When compared to the same period in 2023, productivity still managed a healthy 2.9% increase. Economic analysts believe widespread adoption of artificial intelligence will eventually drive productivity higher while helping control labor expenses.
Meanwhile, unit labor costs — representing what employers pay for each unit of production — climbed 2.3% during the quarter. This increase came in below economists’ expectations of 2.6% growth. These costs rose just 1.2% compared to the previous year.
Worker compensation per hour advanced 3.1% during the first quarter and showed a 4.2% gain when measured against the same timeframe last year. The Labor Department revised fourth-quarter unit labor cost growth upward to 4.6% from the previously calculated 4.4%.
