U.S. First-quarter Productity Revised To Show Steeper 3.1% Drop

U.S. productivity in the first quarter fell by a revised 3.1% annual pace instead of 1.9%, fresh government figures show. Economists surveyed by MarkeWatch had expected a revised 3% drop in productivity owing to poor growth in the first three months of the year. Gross domestic product was recently cut to show a 0.7% decline in the first quarter instead of a 0.2% gain. The increase in hours worked in the first quarter was trimmed to 1.6% from 1.7%. The bigger drop came in output of goods and services, which fell a revised 1.6% instead of 0.2%, the Labor Department said Thursday. Many companies were unable to produce as many goods because of unusually harsh weather and a dockworker's strike that disrupted production schedules and the delivery of key materials. Unit-labor costs rose at a 6.7% annual rate instead of 5%, but the year-over-year increase was still muted at just 1.8%. Hourly compensation for all workers rose 3.3% in the first quarter, and an even stronger 6.5% adjusted for inflation. Lower gasoline prices largely account for the boost in inflation-adjusted incomes.