Productivity down 1% during the first quarter
U.S. productivity fell again in the first three months of the year, while labor costs rose at the fastest pace in more than a year.
Productivity declined at an annual rate of 1 percent in the January-March period, following a 1.7 percent decline in October-December quarter, the Labor Department reported Wednesday.
Labor costs rose at a rate of 4.1 percent in the first quarter, reflecting rising wages. That was the fastest increase since a 5.7 percent jump in the fourth quarter of 2014. Labor costs had been up 2.7 percent in the fourth quarter.
Productivity, the amount of output per hour of work, has been weak for a number of years. Economists worry about the consequences on American lives if it doesn’t improve. Productivity is a key ingredient needed for rising living standards. Rising productivity enables businesses to pay employees higher wages without having to boost the cost of the products and services they sell.