WASHINGTON – U.S. worker productivity declined more sharply in the first three months of the year than previously thought while labor costs rose more quickly.
The Labor Department says that productivity fell at a 3.1 percent rate in the first quarter, a bigger drop than the 1.9 percent decline estimated a month ago. Labor costs rose at a 6.7 percent rate in the first quarter, faster than 5 percent rise first estimated.
The economy hit a soft-patch in the winter with the overall economy, as measured by the gross domestic product, actually contracting in the January-March quarter. But economists believe growth and productivity will rebound in coming quarters. Still, productivity, the amount of output per hour of work, has been weaker in recent years and economists are split on the reasons why.