a 1.4% gain but still an improvement over a
productivity decline of 0.3% in the third quarter.
Labor costs were up at a rate of 0.9% in the
fourth quarter, lower than the 1.4% gain
reported a month ago, but an acceleration from
a tiny 0.2% increase in the third quarter.
For all of 2019, productivity was up 1.9%, the
best annual showing in nearly a decade, since a
3.4% gain in 2010.
While the current economic expansion is the
longest in U.S. history, now in its 11th year,
growth in productivity has lagged significantly,
raising concerns about prospects for future
gains in living standards. But there is hope that
the recent slight productivity uptick may lead to
better results in the future.
Productivity, the amount of output per hour
of work, is a major ingredient in rising living
standards because it allows employers to pay
higher wages funded by the increased output.
Rising productivity along with growth in the
labor market are also the two factors that
determine the economy’s long-run ability to
grow. Growth in the gross domestic product has
been the slowest in this recovery of any in the
post-World War 2 period.
President Donald Trump blamed that weakness
on the Obama administration’s failed economic
policies but so far, he has not been successful in
making significant gains in GDP growth.
The 1.9% productivity gain for the year was up
from smaller increases of 1.4% in 2018 and 1.3%
in 2017.
From 2000 to 2007, the year the Great Recession
began, annual productivity gains averaged
2.7%. However, since that time, productivity