US labour costs increased by less than expected in the fourth quarter

US labour productivity shrank by less than economists had feared at the end of 2015, helping to cap increases in unit labour costs.

Non-farm labour productivity decreased at a 2.2% annual rate in the fourth quarter of 2015, according to the US Bureau of Labor Statistics.

Economists had penciled in a fall of 3.3%.

That was the result of a 1.0% gain in output per hour whereas hours worked jumped by 3.2%.

Together with a 1.1% rise in hourly compensation, the fall in productivity drove unit labour costs up by 3.3% (consensus: 4.8%).

"Even after the upward revision, the four-quarter change in non-farm business output per hour remains tepid at 0.5%, in line with the five-year average.

"On balance, this morning’s report does little to change the fact that US productivity growth remains sluggish in the aftermath of the recession," Barclays's Jesse Hurwitz said in a research report sent to clients.