While the Labor Department released a report on Thursday showing that U.S. labor productivity rebounded in the first quarter of 2013 after falling in the fourth quarter of 2012, the pace of growth fell short of economist estimates.
The report said labor productivity increased by 0.7 percent in the first quarter following a revised 1.7 percent decrease in the fourth quarter.
Economists had expected productivity to increase by about 1.3 percent compared to the 1.9 percent drop that had been reported for the previous quarter.
The increase in productivity, which is a measure of output per hour, came as output surged up by 2.5 percent in the first quarter after rising by a more modest 0.7 percent in the fourth quarter.
The output growth outpaced the increase in hours worked, which rose by 1.8 percent in the first quarter after jumping by 2.4 percent in the fourth quarter.
The report also showed that unit labor costs edged up by 0.5 percent in the first quarter after surging up by 4.4 percent in the fourth quarter. Labor costs had been expected to inch up by just 0.1 percent.
The Commerce Department said the modest increase in labor costs came amid a 1.2 percent increase in hourly compensation in the first quarter. In the fourth quarter, hourly compensation jumped 2.7 percent.
However, real hourly compensation, which takes changes in consumer prices into account, fell by 0.3 percent in the first quarter after rising by 0.4 percent in the fourth quarter.
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 2.5 percent and 1.5 percent, respectively. Unit labor costs rose 0.6 percent year-over-year.
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May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.