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Thursday, May 3, 2018

Productivity Soft, Output Slows, Labor Costs Increase

Productivity was once again soft, up at an annualized rate of 0.7 percent in the first quarter with labor costs well ahead at a 2.7 percent rate. Output slowed in the quarter, to a 2.8 percent rate of growth from 3.7 percent in the fourth quarter, but hours worked also declined, to 2.1 from 3.3 percent. Compensation rose in the quarter to a 3.4 from 2.4 percent rate with inflation-adjusted compensation, however, still in the negative column at minus 0.1 vs the fourth-quarter's minus 0.8 percent rate. A vital sign for the economy, productivity has been modest at best through the length of the ongoing expansion.

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