WASHINGTON – U.S. nonfarm productivity increased at a 3.6% annual rate in the first quarter ended March 31, exceeding economists' estimates, the Labor Department reported today.
Unit labor costs fell 1.6%, the third straight quarterly decline. Unit labor costs record the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.
Hourly compensation increased 1.9%, the largest increase since the second quarter of 2009.
Economists polled by Thomson Reuters expected productivity to increase 2.5% and for unit labor costs to decline 0.7%, according to the median estimate.
Productivity increased 6.3% from the first quarter of 2009, the strongest gain since the first quarter of 1962.
Productivity in the fourth quarter of 2009 was revised lower to a 6.3% rise from the 6.9% increase reported in the last release. Unit labor costs in the fourth quarter were revised to a 5.6% drop from the most recent estimate of a 5.9% decline.
