US productivity grew at weak 0.4 per cent rate in Q1
WASHINGTON — U.S. productivity grew at an annual rate of just 0.4 per cent in the first quarter, even weaker than initially estimated, while labour costs rose at a bit faster pace.
The Labor Department said Wednesday that the January-March productivity increase was revised down from the 0.7 per cent gain initially estimated a month ago. Labor costs rose 2.9 per cent, up from an initial estimate of a 2.7 per cent gain in the first quarter. The rise in productivity was only marginally better than the 0.3 per cent increase in the fourth quarter but below the 2.6 per cent third quarter increase.
Productivity, a key factor determining how fast the economy can grow and how much living standards can increase, has been anemic throughout the economic recovery. It increased just 1.3 per cent for all of 2017.
Productivity is the amount of output per hour of work. The small revision to the first quarter figure reflected the fact that the economy’s overall output of goods and services as measured by the gross domestic product was revised down slightly to a GDP growth rate of 2.2 per cent in first quarter instead of the initial estimate of 2.3 per cent.