The productivity of American workers fell in the first quarter by the sharpest amount in a year, while labor costs increased.
Productivity declined at an annual rate of 0.6 percent in the January-March quarter after rising at a 1.8 percent rate in the fourth quarter, the Labor Department reported Thursday. It was the biggest decline since a 0.7 percent rate of decline in the first quarter of last year.
Labor costs rose at a 3 percent rate, up from a 1.3 percent rate of increase in the fourth quarter.
Productivity, the amount of output per hour of work, has been weak through most of the current recovery. Many analysts believe it is the biggest economic challenge facing the country, but there is no consensus on the cause of the slowdown.
The weak performance for productivity had been expected given that overall output, as measured by the gross domestic product, slowed