U.S. productivity rebounds in Q1

U.S. productivity grew at a strong 3.4% rate in the January-March quarter, the best showing in more than four years. It is an encouraging sign that productivity may finally be improving after a long stretch of weakness.

The first quarter gain was more than double the 1.3% increase in the fourth quarter, although it was slightly lower than an initial estimate of 3.6% made a month ago. Labour costs fell during the first quarter, declining by 1.6% following a 0.4% drop in the fourth quarter.

Productivity, the amount of output per hour of work, is a key factor determining an economy’s growth potential. If the current rebound continues, it would provide support for President Donald Trump’s efforts to achieve sustained 3% growth rates.

Martin Crutsinger, The Associated Press

Martin Crutsinger is a reporter with The Associated Press,  an American not-for-profit news agency headquartered in New York City and founded in 1846.