U.S. worker productivity was not as weak as initially thought in the first quarter, but the persistently soft trend is an obstacle to faster economic growth.
The Labor Department said on Monday non farm productivity, which measures hourly output per worker, was unchanged in the last quarter. It was previously reported to have declined at a 0.6 percent annualized pace.
The government also reported that the growth in labor costs at the start of the year was not as strong as reported in May, which could cast doubts on the tightening labor market’s ability to unleash robust wage growth.
The revision to first-quarter productivity was in line with economists’ expectations. Productivity increased at an unrevised 1.8 percent pace in the fourth quarter.
U.S. financial markets were little moved by the report.
Compared to the first quarter of 2016, productivity grew at a 1.2 percent rate, pointing to some improvement.
Productivity has increased at an average annual rate of 0.6 percent over the last five years, below its long-term rate of 2.1 percent from 1947 to 2016, indicating that the economy’s potential rate of growth has declined.\
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