American workers were less efficient in the July-September quarter, pushing down productivity for the first time since late 2015.
The Labor Department said Wednesday that productivity, a measure of economic output for each hour worked, fell 0.3% in the third quarter. The drop comes after two quarters of healthy gains.
Still, productivity has increased just 1.4% in the past year, about two-thirds of its long-run average. Weak productivity growth has been a hallmark of the current economic expansion, now in its 11th year. It is a key reason the overall economy has expanded more slowly than in previous expansions.
Greater productivity is a key ingredient in raising living standards. It enables companies to lift worker pay without raising prices on customers.