BUSINESS

US productivity grew at modest annual rate of 0.5 per cent in first quarter

06/05/2013 08:50 EDT | Updated 08/05/2013 05:12 EDT
WASHINGTON - U.S. worker productivity grew a modest amount from January through March after having declined in the previous quarter. Weak productivity growth could boost hiring if consumers and businesses spend more.

The Labor Department says productivity rose at a seasonally adjusted annual rate of 0.5 per cent in the first quarter, following a 1.7 per cent decline in the October to December period.

The first quarter performance was revised down slightly from an initial estimate of a 0.7 per cent first quarter increase. The revision reflected the fact that the government lowered its estimate of overall economic output in the first quarter from a rate of 2.5 per cent down to 2.4 per cent. Productivity is the amount of output per hour of work.

Labour costs actually fell in the January to March quarter, dropping at an annual rate of 4.3 per cent after having surged at an 11.8 per cent rate in the fourth quarter.