Worker Productivity Slips for 1st Time in 4 Years as Labor Costs Revised Lower

Growth of U.S. labor costs was not as robust as initially thought in the third quarter, suggesting inflation could remain tame in the near term.

The sharp downward revision to labor costs, reported by the Labor Department on Tuesday, also pointed to some easing of the squeeze on profit margins. Corporate profits have been reduced by strong labor cost growth that has outpaced revenue. With worker productivity still sluggish, however, the pace of growth in labor costs is likely to remain solid.

“This is certainly good news for companies’ profit...