WASHINGTON – American companies squeezed more out of their workers in the first quarter of this year than previously reported, a government report on the productivity of U.S. workers showed on Wednesday.
U.S. non-farm productivity (search) climbed 1.9 percent in the first three months of the year, the Labor Department (search) said, an upward revision from the previously reported 1.6 percent gain. The number met analysts' expectations and followed an increase of just 0.7 percent in the final quarter of last year.
"It's encouraging that we're continuing to see healthy productivity growth," said Mark Vitner of Wachovia Securities. "Historically it's still a robust rate of productivity growth."
Speaking on Tuesday, Federal Reserve Chairman Alan Greenspan (search) said U.S. productivity has been surprisingly resilient given weak economic growth.
The central bank chief said he is expecting business investment to rise modestly in the second quarter while worker hours are likely to fall, leading to a "fairly significant increase" in productivity growth.
The productivity rise may bode well for corporate profits later in the year as companies produce more at lower cost.
"As the economy gains momentum we should see a fairly strong upswing in corporate profits," Vitner said.
Workers' compensation (search) per hour was revised down to a gain of 3.4 percent from a previously reported rise of 3.5 percent.
Unit labor costs, a closely watched measure of wage pressures, were revised down to a 1.5 percent increase, just below analyst forecasts for a 1.6 percent rise.
Greenspan said last month productivity growth should never be seen as negative, even though it raises the level of economic growth needed to create jobs.