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U.S. Productivity Drops Most Since 1947, Driving Up Labor Costs

  • Output per hour slumped an annualized 7.5% in first quarter
  • Unit labor costs post largest annual increase since 1982
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U.S. Productivity Drops as Labor Costs Jump
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U.S. productivity dropped in the first quarter by the most since 1947 as the economy shrank, while labor costs surged and illustrated an extremely tight job market.

Productivity, or nonfarm business employee output per hour, decreased at a 7.5% annual rate from the previous three months, according to Labor Department figures Thursday. That compared to a 6.3% gain in the fourth quarter and the 5.3% projected decline in a Bloomberg survey of economists.