Productivity Up in First Quarter

Washington, DC, June 4, 2008--U.S. productivity rose sharply in the first quarter, according to revised government data.

Labor costs grew at their slowest annual pace since 2004, which should provide some relief to Federal Reserve policymakers that soaring food and energy prices aren't leading to a wage-price spiral like they did in the 1970s and early 1980s.

Nonfarm business productivity increased at a 2.6 percent annualized rate in the first quarter, the Labor Department said. That was up from the previous estimate of a 2.2 percent rise.

Wall Street economists had expected a revised 2.5 percent rise in the first quarter.

Compared to the first quarter of 2007, productivity jumped 3.3%, the fastest year-to-year rise since the second quarter of 2004.

Labor costs rose 2.2% in the first quarter, slightly above economist forecasts for a 2 percent increase. Labor costs were up just 0.7 percent  from one year ago, the slowest rise since 2004,.