Productivity Up in 1Q

Washington, DC, May 4, 2006–The productivity of the American workplace increased at a 3.2% annual rate in the first three months of the year, the Labor Department said Thursday.

Unit labor costs–a key inflation gauge–increased 2.5% in the nonfarm business sector in the quarter.

Both numbers were higher than expected. Economists surveyed by MarketWatch predicted productivity would rise 2.9%, while unit labor costs were expected to rise 1.3%.

In the past four quarters, productivity has increased 2.4%, while unit labor costs are up 1.4%. In the manufacturing sector, productivity increased at a 4.2% annual rate in the first quarter, while unit labor costs fell 2.6%.