The productivity of American workers continued to decline last quarter rather than edging up slightly as reported in preliminary estimates a month ago, the government announced yesterday.
The dip marked the third quarterly drop in a row, making it likely that the nation will post a decline in productivity for the year as a whole for only the second time since records have been kept beginning in 1947.
Declining productivity is one of the nation's major problems in its efforts to dampen inflation. When output per work hour drops, businesses cannot absorb cost increases easily and are forced to boost prices faster.
The revised figures showed productivity declined at an 0.7 percent annual rate last quarter instead of rising at an 0.1 percent pace as calculated previously. Unit labor costs soared at a 9.6 percent annual rate.
At the same time however, productivity in the manufacturing sector of the economy leaped at a 3.3 percent annual rate during the quarter, holding the rise in unit labor costs there to a 4.7 percent annual pace.
Productivity in the overall private business sector plunged at a 2.2 percent annual rate in the second quarter and at a 3 percent pace in the first quarter. There were even steeper declines in the non-farm business sector.
Until this year, productivity had declined only once in the 32 years the nation has been keeping records on it -- in 1974, at the start of the country's steepest postwar recession. In the 1960s, productivity rose 3.2 percent a year.
The revised figures came as housing industry economists forecast that, mostly because of rising mortgage rates, construction will fall off sharply in 1980, with new starts dropping to 1.26-1.4 million units.
Housing starts for 1979 are expected to total about 1.7 million units for the year.
The forecasts came in testimony before the congressional Joint Economic Committee and during a conference sponsored by the National Association of Home Builders.
Jay Janis, chairman of the Federal Home Loan Bank Board, told the JEC the housing slump probably will hit bottom in the spring or summer of 1980. But he said demand still will be strong and housing will rebound quickly.
Separately, the Carter administration's new Pay Advisory Committee met yesterday and agreed tentatively on a set of specific proposals affecting "tandem" contracts to be discussed with the administration.