U.S. productivity climbs in first quarter but trend still weak

• May 3, 2018
• realestate
• Announcements, Business & Markets, Real Estate, Real Estate Finance, Your Real Estate Life

The productivity of American businesses rose 0.7% in the first quarter, but there’s little sign of long-term improvement in what’s been a weak link for the U.S. economy.

Output — or goods and services produced — increased 2.8%. Hours worked rose 2.1%. Productivity is determined by the difference between the two.

The cost of labor, meanwhile, rose sharply. Unit-labor costs, or how much it costs to make each product, climbed by 2.7%, perhaps a sign that a tight labor market and rising prices for raw materials are starting to pinch.

The overall trend in labor costs is more muted, however. Unit-labor costs have risen a paltry 1.1% in the past four quarters.