Productivity Fell By The Largest Amount Since 1960 In The Third Quarter

Asian office workers wearing face masks working in the new normal office and doing social distancing during coronavirus covid-19 pandemic

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The Bureau of Labor Statistics revised economic data from the third quarter and found that the drop in productivity was worse than initially reported. When the data was released last month, productivity was down by 5%, the biggest drop since 1981.

According to the revised data, productivity fell by 5.2% on a seasonally adjusted basis. That is the largest drop since 1960 when productivity fell by 6.1%, CNN reported.

The drop in productivity comes as workers are seeing larger paychecks, with a 3% increase in hourly wages. Workers are also putting in more hours as businesses deal with a labor shortage, forcing some employees to work longer shifts.

The increase in wages and hours worked caused unit labor costs to rise by 9.6%, up from 8.3% in the original report.

Economists say the decrease in productivity was expected because of ongoing supply chain issues and the surge in coronavirus cases as the Delta variant spread across the country over the summer. The third quarter runs from July 1 to September 30.

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