Worker productivity falls as American economy contracts

• Published February 08, 2013 Modified February 07, 2013

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The productivity of U.S. workers fell more than projected in the fourth quarter as the economy shrank, pushing labor expenses up, showing companies are approaching the limit of how much efficiency they can wring from employees.

The measure of employee output per hour decreased at a 2 percent annual rate, the worst performance in almost two years, after a 3.2 percent gain in the prior three months, a Labor Department report showed Thursday in Washington. The median forecast in a Bloomberg survey of 63 economists called for a 1.4 percent drop. Expenses per worker increased at a 4.5 percent rate, more than estimated.

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