Productivity growth slows to 2.8 percent gain
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) — Productivity grew at a slower rate in the first three months
of the year than previously thought, a possible sign that businesses are
reaching the limits of their ability to boost output with fewer workers.
The Labor Department says productivity advanced at an annual rate of 2.8
percent in the January-March period. That is the slowest pace in a year and
much lower than the 3.6 percent that the government initially reported a month
ago. Labor costs still declined but at a slower 1.3 percent annual rate instead
of the 1.6 percent drop initially estimated.
A slowing in productivity gains could actually be good news for the economy. It
would mean that businesses have ended the heavy layoffs that were occurring
during the depths of the recession.