U.S. productivity fell at the end of 2005. The U.S. Labor Department said today that nonfarm business sector productivity decreased 0.6% during October through December, after rising 4.5% in the third quarter.

The drop marked the weakest showing in productivity since a 0.9% slide in the third quarter of 2000. It was the first decline since a 0.4% fall in the first quarter of 2001.

The report Thursday said non-farm business output grew just 0.9% October through December; the number is derived from the GDP report. Hours worked rose by 1.5%.

Hourly compensation climbed 2.8%. Real compensation, adjusted for inflation, decreased 0.4%.

In the third quarter, productivity climbed 4.5%, output advanced 4.7%, hours worked grew 0.1%, compensation rose 4.1%, and real hourly compensation slid 1%.

Annually, non-farm business sector productivity rose 2.7% in 2005, lower than the 3.4% rate of increase in 2004 and the weakest showing since a 2.5% gain in 2001. Unit labor costs were up 2.4%, the largest increase since 2000, when costs rose 4.2%.

Separately, initial jobless claims decreased by 11,000 to a seasonally adjusted 273,000 in the week ending Jan. 28, the Labor Department said Thursday. The four-week moving average of initial jobless claims fell last week, down by 4,750 to 284,250 from 289,000. The mean is the lowest since the week of June 10, 2000, when the average stood at 283,500.