Worker Output Had The Largest Decline Since 1947 In The First Quarter

By Bill Galluccio

May 5, 2022

Production Planning Control Engineers are having discussion or follow up about chassis part production progress in automobile industry. They are expert in production planning control activities to improve runtime while maintaining high quality, timely del
Photo: Getty Images

Worker productivity plummeted at the fastest rate in 75 years during the first quarter of 2022. According to the latest data from the Bureau of Labor Statistics, nonfarm business sector labor productivity decreased by 7.5%. The decline marked a huge turnaround from the fourth quarter of 2021, which saw productivity increase by 6.3%.

The Bureau of Labor Statistics determines the productivity rate by dividing an index of real output by an index of hours worked by all workers.

While hours worked during the first quarter were up by 5.5%, output declined by 2.4%, which was the first quarterly decrease since the second quarter of 2020, when the country was in the middle of coronavirus lockdowns.

At the same time that productivity decreased, labor costs increased by 11.6%, the largest increase since the third quarter of 1982. The rising cost of labor is having a negative impact on small businesses as they struggle to recover amid the coronavirus pandemic. According to Reuterslayoffs increased by 14% in April, marking the second straight month that the companies have reported a rise in terminations.

"Productivity in the first quarter is likely misleadingly low as a result of the measured decline in real GDP, but adjusting for this does not change the broad picture of rapidly rising business costs and output prices," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Advertise With Us
Music, radio and podcasts, all free. Listen online or download the iHeart App.

Connect

© 2025 iHeartMedia, Inc.