U.S. nonfarm productivity fell at
its fastest pace in a year in the first quarter as harsh winter weather
restrained output, leading to a jump in labor-related production costs, Reuters
reported. Productivity declined at a 1.7 percent annual rate, the biggest
drop since the first quarter of 2013, the Labor Department said on Wednesday.
The drop in productivity, which mirrored a sharp decline in economic growth, is
temporary, and Federal Reserve officials are likely to shrug off the spike in
labor costs, analysts said. Productivity, which measures hourly output per
worker, advanced at a 2.3 percent pace in the fourth quarter; economists had
expected it to decrease at a rate of only 1 percent in the first three months
of the year.