The productivity of American workers rose moderately last quarter, the Labor Department reported yesterday, but the overall gain for the year still amounted only to 0.4 percent -- heightening inflation pressures and stunting growth.
The poor showing for 1978 marked the worst performance since the start of the 1974-75 recession, when productivity declined 3 percent. An annual rise in productivity of 3.2 percent a year was considered the norm in the 1960s.
Separately, the department reported first-year wage increases in collective bargaining settlements averaged 7.7 percent in 1978, about the same as in the previous year -- a moderate performance considering the inflation rate.
Moreover, pay-and-fringe benefit packages won by larger labor unions slowed to an average 8.4 percent for the first 12 months of the contract, down from 9.6 percent in 1977. Consumer prices last year rose 9 percent.
The combination of statistics bolstered warnings by the Carter administration on Thursday that, largely because of the sharp falloff in productivity, the nation's standard of living is likely to improve only slowly for years to come.
When productivity gains were large, employers could step up production without adding more workers. But when the gains fall short, as they did in 1978, hiring rates accelerate -- exacerbating wage increases in the process.
Yesterday's figures showed the falloff in productivity during 1978 pushed unit labor costs of business up a steep 8.9 percent -- also the sharpest increase since 1974 -- a factor that almost certainly will be passed on in higher prices.
The low productivity performance for the year came despite a moderately strong increase in the final three months of 1978, when productivity rose at a 2.1 percent annual rate, following a 3.5 percent pace the previous quarter.
Productivity refers to the average volume of goods and services the American economy produces for each hour of work performed. In essence, it is a measure of the efficiency of the American economy.
In comparison to last year's 0.4 percent rise, overall productivity climbed 1.6 percent in 1977, 3.5 percent in 1976 and 2.1 percent in 1975.
The 2.1 percent fourth-quarter annual rate and the 0.4 percent rise for 1978 as a whole both were for productivity in the entire private business sector, including agriculture, which sometimes is unstable.