Productivity--as measured by output per hour--rose 2.8 percent in the fourth quarter of 2008. The increase was a result of a steep fall off in hours that offset a decline in output.
For the entire year, productivity rose 2.8 percent.
In the fourth quarter, manufacturing productivity decreased for the third consecutive quarter; output per hour fell at a 3.0 percent annual rate in the fourth quarter. The fourth-quarter decline was concentrated in the durable goods sector.
Output per hour in total manufacturing posted a 1.3 percent increase in 2008 on an annual average basis. Output and hours in manufacturing, which includes about 12 percent of U.S. business-sector employment, tend to vary more from quarter to quarter.
Hourly compensation rose 5.0 percent in the fourth quarter of 2008 following a 4.2 percent increase in the third quarter. When the 9.2 percent decrease in consumer prices was factored in, real hourly compensation jumped 15.6 percent during the fourth quarter (seasonally adjusted annual rates). This was the largest increase in real hourly compensation since the beginning of the series in the second quarter of 1947. However, real hourly compensation had declined in each of the first three quarters of 2008, and as in the business sector, the change from the same quarter a year ago was 1.9 percent.
Unit labor costs rose 1.8 percent in the fourth quarter of 2008, and 0.7 percent over the last four quarters.