U.S. workers were more productive in the first quarter of 2009 than previously estimated, the government reported Thursday, as widespread layoffs meant companies were forced to do business with fewer employees. The Labor Department said productivity—the amount of output per hour worked—rose at an annual rate of 1.6 percent in the first quarter, double its estimate last month. Higher productivity raises living standards because workers that produce more can earn higher wages without companies forced to increase prices. Labor costs rose 3 percent in the January-March period, down from 3.3 percent in the fourth quarter of 2008. A rapid increase in labor costs could fuel inflation, as employers pass on the higher costs to consumers by raising prices. But most economists are not worried about inflation because the recession is limiting wage demands.
