Washington, DC, Jun. 3--The productivity of America's workers in the opening quarter of 2004 grew at a brisk 3.8% annual rate, faster than previously thought. Labor costs moved up.
The increase in productivity--the amount an employee produces for every hour on the job--was up from an initial estimate of a 3.5% growth rate for the first quarter and exceeded the 2.5% pace registered in the final quarter of 2003, the Labor Department reported Thursday.
The new reading on first-quarter productivity was slightly better than the 3.7% growth rate that some economists were predicting. It marked the best showing since the third quarter of 2003.
Unit labor costs, meanwhile, rose at a 0.8% pace in the first quarter, up from the previous estimate of a 0.5% pace and following a 1.7% rate of increase in the fourth quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. The recent rise in these costs, should they continue, could put pressure on companies' profit margins, analysts say.
Companies in the first quarter boosted output at a 5.4% rate, stronger than previously estimated and up from a 4.2% growth rate in the fourth quarter. Workers' hours, meanwhile, rose at a 1.5% rate, faster than first estimated and following a 1.6% growth rate in the fourth quarter.
During the economic slump, gains in productivity came at the expense of workers. Companies produced more with fewer employees. But with the economy rebounding, companies have slowly stepped up hiring and are boosting their efficiencies.
