U.S. worker productivity increased less than initially thought in the first quarter, while growth in unit labor costs was a bit stronger, supporting views that inflation pressures were steadily building up.
The Labor Department said on Wednesday nonfarm productivity, which measures hourly output per worker, rose at a 0.4 percent annualized rate in the January-March quarter, instead of the 0.7 percent pace it reported last month.
Fourth-quarter productivity rose at an unrevised 0.3 percent. Economists polled by Reuters had expected that first-quarter productivity would be revised down to a 0.6 percent growth rate.
Compared to the first quarter of 2017, productivity increased at an unrevised rate of 1.3 percent.
Hourly compensation accelerated at a 3.3 percent rate in the January-March quarter, rather than the 3.4 percent pace reported last month. Compensation rose at 2.9 percent pace in the fourth quarter. It increased at a 2.6 percent rate compared to the first quarter of 2017.
Unit labor costs, the price of labor per single unit of output, rose at a 2.9 percent pace in the first three months of the year, rather than the 2.7 percent rate reported in May.
Labor costs rose at a rate of 2.5 percent in the fourth quarter. They were up at a 1.3 percent rate compared to the first quarter of 2017.
