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U.S. productivity drops in first quarter

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Productivity
America   Weak productivity

The Labor Department said productivity decreased at a 0.6 percent annualized rate in the first quarter, the weakest in a year, after rising at a 1.8 percent pace in the fourth quarter.

It increased at a 1.1 percent rate compared to the first quarter of 2016.

Productivity has increased at an average annual rate of 0.6 percent over the last five years, well below its long-term rate of 2.1 percent from 1947 to 2016.

Weak productivity suggests economic growth is likely to remain moderate.

With productivity soft, unit labor costs jumped at a 3.0 percent pace in the first quarter after rising at a 1.3 percent rate in the fourth quarter. They increased at a 2.8 percent rate compared to the first quarter of 2016.

Another report from the Commerce Department showed the trade gap dipped 0.1 percent to $43.7 billion in March as both imports and exports fell, signaling slackening domestic and global demand.

In another report, the department said new orders for U.S.-made goods increased for a fourth straight month in March and orders for capital equipment were stronger than previously reported, suggesting a sustained recovery in the manufacturing sector.


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