U.S. productivity fell more than previously estimated in the January-March quarter, while labor costs rose at a faster pace, the government reported Wednesday. The Labor Department said productivity - the amount of output per hour of work - declined at an annual rate of 3.2 percent in the first quarter, the weakest performance since the early months of the Great Recession in 2008. Unit labor costs rose at a 5.7 percent annual rate, the fastest pace in more than a year. Initially, the department reported that first-quarter productivity fell at a smaller 1.7 percent rate and labor costs rose at a 4.2 percent pace. Rising labor costs and declining productivity can cause concern if they are an indication that inflation is worsening. But the first-quarter performance was seen as a temporary setback caused by an unusually severe winter, which caused the economy to contract. A strong rebound in productivity is expected in the current April-June quarter.
