WASHINGTON — U.S. nonfarm productivity rose less than expected in the first quarter of this year, increasing by 0.7% on a significant pickup in output and a healthy growth in hours worked, preliminary data released by the Bureau of Labor Statistics Thursday showed.
As the increase in productivity growth was less than the rise in hourly compensation, unit labor costs rose by a mere 0.5% — this after a downwardly revised 4.4% increase the previous quarter. The increase matched the median expectation in an MNI survey of analysts.
The rise in Q1 productivity decline was less than the 0.9% rise expected in MNI's survey, and followed an upward revision in the previous quarter to a 1.7% decline from the previously reported 1.9% drop.
Output jumped 2.5% in the first quarter, bouncing back from a hurricane-weakened Q4 (+0.7%). Hours worked were up a solid 1.8%, although that is a slower rate than the 2.4% pace set in Q4.
Hourly compensation rose 1.2% in the quarter after rising by 2.7% in Q4. Real compensation declined further in Q1, down 0.3% following a decline of 0.6% in the previous quarter.
On a year-over-year basis, productivity growth now stands at a 0.9% rate, up from 0.6% in the fourth quarter. The year/year rate for unit labor costs rose 0.6% in the first quarter after an increase of 2.0% in the fourth.
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