U.S. Labor Productivity Suffers Biggest Crash Ever Recorded, Labor Costs Soar Most Since 1982

Productivity crashed over the past year as the economy added workers at a rapid clip even as economic output grew slowly, data from the Department of Labor showed on Tuesday.

The productivity of the business sector fell 2.5 percent compared with a year ago, the largest decline ever recorded in data going back to the first quarter of 1948, the Bureau of Labor Statistics said Tuesday. The decline comes from a 1.5 increase in economic output and a 4.1 percent increase in total hours worked.

Productivity declined at a seasonally adjusted annual rate of 4.6 percent in the second quarter. That’s a less rapid decline than the 7.6 percent contraction recorded in the first three months of the year but slightly below economist expectations for a 4.5 percent decline.

The economic output of the business sector fell 2.1 percent and hours worked increased 2.6 percent.

The data does not include work done on U.S. farms or in the public sector.