WASHINGTON - U.S. non-farm productivity rose 1.6% in the first quarter of 2011 according to the Labor Department's first estimate released Thursday, down from a revised estimate of 2.9% for the fourth quarter of 2010.
Unit labor costs, the ratio of hourly compensation to productivity, rose 1.0% after a revised decline pf 1.0% in the fourth quarter of 2010. Output and hours worked were both revised lower.
Economists were expecting a 1.0% increase in productivity and a 0.8% increase in unit labor costs according to the Thomson Reuters poll.
Workers output fell to a 3.1% gain from the 4.4% increase reported last quarter.
Hours worked were up 1.4% in the first quarter, after a 1.5% increase in the fourth quarter.
Hourly compensation fell 2.5% in the first quarter, after a revised 0.8% decline last quarter.
In the manufacturing sector, productivity rose 6.3%, after a revised 5.1% in the fourth quarter. Output was 9.7% after a revised 4.0% gain last quarter.
Manufacturers’ unit labor costs were down 3.5% in the first quarter following a revised 2.3% decrease in the fourth quarter of last year.
Manufacturing productivity increases over the last two years have been based primarily on cost cutting. Analysts have expected that trend to level off as companies reach the limits of their cost-cutting ability.
