The productivity of American workers plunged at a near-record pace last quarter, the government reported yesterday, sending unit labor costs soaring and heightening unflationary pressures in the economy.
Revised figures published by the Labor Department showed output per work hour fell at a 4.6 percent annual rate during the first three months of this year - the steepest drop since early 1974 and the second-largest on record.
The increase sent unit labor costs of American business soaring at a 16.4 percent annual rate, pointing to almost-certain further increases in prices. When productivity is good, industry can absorb some cost increases.
Meanwhile, the machine-tool industry reported its own orders fell 5 percent in April, bolstering earlier signs that the economy has begun to slow some from its previous pace. Machine-tool orders are a key barometer of the economy.
The report on productivity marked bad news for the Carter administration's anti-inflation efforts. Declining productivity has been a major factor in forestalling any improvement in the inflation outlook.
The first-quarter decline, at an annual rate of 4.6 percent was down from a 4.5 percent pace in previous estimates and compared to a scant 0.3 percent increase for all of 1978. Productivity rose 1.7 percent in 1977, just over half the rate considered "optimal" for the long run.
Yesterday's revisions were particularly bleak for the manufacturing sector of the economy, where new data showed productivity fell at a 3.2 percent annual rate rather than the 2.8 percent pace recorded previously.
The department also reported yesterday that productivity in non-financial corporations declined at a 3.3 percent annual rate last quarter - the first such dip since early 1978. The rise in the previous quarter was at a 2.2 percent pace.
The drop in machine tool orders pushed the overall level of orders down to $459.8 million from $482 million in March. Even with the decline, however, orders still were a hefty 21 percent higher than the level of a year ago.
James A. Gray, the president of the National Machine Tool Builders Association, the industry trade group which compiles the figures, said that despite the 5 percent dropoff, the April level still showed strength in the economy.
However, other analysts cited the falloff as evidence that the economy has begun to slow some from its earlier pace. Analysts are divided over whether that means a recession is underway.
The machine-tool figures showed shipments also were down in April, declining 9 percent from March levels.