Share
June 4, 2014 11:35 AM, EDT
Worker Productivity Declined in First Quarter
Polar Corp.

U.S. workers’ productivity declined in the first quarter at a higher rate than previously estimated to the weakest showing since start of the recession in 2008, the Labor Department reported.

Productivity declined at a 3.2% annual rate from January to March, up from a previously estimated 1.7%, according to the Labor Department.

Unit labor costs rose at a 5.7% rate, the fastest pace in more than a year.

The first-quarter performance was seen as a temporary bump caused by an unusually harsh winter, but a strong rebound is expected this quarter, the Associated Press reported.

Economic growth in the April-June quarter is estimated to be 3.8% as warmer weather boosts consumer spending, AP reported.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.