Businesses More Productive in Fourth Quarter

Washington, DC, March 7, 2012 -- Business productivity in the fourth quarter was higher than previously believed, but businesses also faced higher labor costs, according to the Labor Department.

The rise in hourly wages could be a sign that businesses need to add workers to keep up with rising demand for goods and services.

Productivity climbed 0.9% in the final quarter of 2011, up from an initial estimate of 0.7%, the Labor Department said.

The amount of goods and services produced, known as real output, grew at an annual rate of 3.7%, slightly higher than the original estimate of 3.6%.

Hours worked rose 2.7%, down slightly from a 2.9% rate initially estimated.

Hourly compensation, adjusted for inflation, shot up 2.8% in the fourth quarter, much higher than the initial reading of 1.9%.