American workers were more efficient in the fourth quarter, but their gains in productivity slowed from the previous quarter, and initial jobless claims fell last week, the government reported Thursday. The Labor Department said worker productivity rose at an annual rate of 0.7 percent in the fourth quarter, which was below a 1.9 percent rate in the previous quarter. Labor costs rose 1.2 percent in the final quarter of the year, as wages and salaries grew at a faster pace than productivity. Inflation-adjusted wages fell 1.2 percent in all of 2011, which is the steepest annual drop since 1989. Productivity is the amount of output per hour of work. A slowdown in productivity is bad for corporate profits, but it can be good for the economy if it signals companies are not able to get more work out of their existing staffs. It often means that companies must hire more workers to grow. Productivity rose during the recession, mostly because companies increased output while not hiring many new workers. The department also reported Thursday that unemployment applications fell 12,000 last week to 367,000. The four-week average of jobless claims dropped for the third straight week to 375,750. It was the second-lowest level for the four-week average since June 2008. A consistent rate below 375,000 usually signals that hiring is strong enough to lower the unemployment rate, economists say.
