With output increasing by less than previously estimated, the Labor Department released a report on Wednesday showing a downward revision to the pace of growth in U.S. labor productivity in the first quarter of 2013.
The report said productivity, a measure of output per hour, increased by 0.5 percent in the first quarter compared to the previously reported 0.7 percent growth. Economists had expected the pace of productivity growth to be unrevised.
Despite the downward revision, the modest increase in productivity in the first quarter still reflects a rebound from the 1.7 percent drop seen in the fourth quarter.
The downward revision to the pace of first quarter productivity growth came as output increased by 2.1 percent compared to the previously reported 2.5 percent growth.
The report also showed a significant revision to unit labor costs, with the revised data showing a 4.3 percent drop in labor costs in the first quarter compared to the previously reported 0.5 percent increase.
The steep drop in labor costs reflected a 3.8 percent decrease in hourly compensation. The Labor Department said the decline in hourly compensation is the largest in the series, which begins in 1947.
Real hourly compensation, which takes changes in consumer prices into account, tumbled by 5.2 percent in the first quarter.
Meanwhile, the report showed a substantial upward revision to the increase in unit labor costs in the fourth quarter. The revised data said labor costs soared by 11.8 percent compared to the 4.4 percent growth previously reported.
Hourly compensation jumped by a revised 9.9 percent in the fourth quarter, while real hourly compensation surged up by 7.5 percent.
Compared to the same quarter a year ago, productivity increased by 0.9 percent in the first quarter, as output and hours worked rose by 2.4 percent and 1.5 percent, respectively. Unit labor costs rose 1.1 percent year-over-year amid a 2.0 percent increase in hourly compensation.
by RTT Staff Writer
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