cloudyn.png
Monday December 16th, 2019 2:08AM

US productivity grew at solid 3.4% rate in first quarter

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — U.S. productivity grew at a strong 3.4% rate in the January-March quarter, the best showing in more than four years, the Labor Department reported Thursday. It was an encouraging sign that productivity may finally be improving after a long stretch of weakness.

The first quarter gain was more than double the 1.3% increase in the fourth quarter, although it was slightly lower than an initial estimate of 3.6% made a month ago. Labor costs fell during the first quarter, declining by 1.6% following a 0.4% drop in the fourth quarter.

Productivity, the amount of output per hour of work, is a key factor determining an economy's growth potential. If the current rebound continues, it would provide support for President Donald Trump's efforts to achieve sustained 3% growth rates.

The slight downward revision in productivity reflected the fact that overall output, as measured by gross domestic product, was revised down from an initial estimate of 3.2% growth to 3.1% growth in the first quarter.

The 3.4% advance in productivity was the strongest increase since a 3.7% rise in the third quarter of 2014. Productivity has risen 2.4% over the past four quarters, the best performance since a 2.7% four-quarter gain in 2010.

Productivity gains over the past decade have been lackluster, averaging just 1.3% annually from 2007 through 2018. That was less than half the 2.7% gains seen from 2000 to 2007, a period when the economy was benefiting from technology improvements in computers and the internet. From 1947 through 2018, annual productivity gains averaged 2.1%.

Economists see the slowdown in productivity over the past decade as one of the country's biggest economic challenges. But recent signs indicate that may be turning around. The economy's potential to grow is governed by two major factors, growth of the labor force and growth in productivity.

For all of 2018, GDP growth was 2.9%. The Trump administration has projected sustained GDP gains of 3% or better over the next decade, well above the 2.2% average GDP gains seen since the current expansion began in June 2009.

In a separate report Thursday, the Labor Department said that applications for unemployment benefits, a proxy for layoffs, held steady at 218,000 last week. That is a low level that indicates a strong job market. The government will release its May jobs report on Friday.

  • Associated Categories: Local/State News, Associated Press (AP), AP Business, AP Business - Economy
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
US productivity grew at solid 3.4% rate in first quarter
US productivity grew at solid 3.4% rate in first quarter, best showing in 4 years
8:37AM ( 6 minutes ago )
US trade deficit shrinks to $50.8 billion in April
US trade deficit shrinks 2.1% to $50.8 billion in April, but gap with China grows
8:35AM ( 8 minutes ago )
The Latest: Trump meets Macron in France
President Donald Trump and French President Emmanuel Macron are meeting in Caen on the northern coast of France not far from the Normandy American Cemetery where they marked the 75th anniversary of D-Day
8:27AM ( 16 minutes ago )
Associated Press (AP)
After Fed, Europe also helps economy cope with trade concern
The European Central Bank has taken action to support the economy in the 19 countries that use the euro, responding to fears about global trade conflicts
7:59AM ( 44 minutes ago )
The Latest: European Central Bank gives economy more support
The European Central Bank has taken action to support the economy in the 19 countries that use the euro, responding to fears about global trade conflicts
7:51AM ( 52 minutes ago )
World stocks advance ahead of European Central Bank update
World markets rise on hopes that European Central Bank would shore up support for the economy
7:39AM ( 1 hour ago )
AP Business
US trade deficit shrinks to $50.8 billion in April
US trade deficit shrinks 2.1% to $50.8 billion in April, but gap with China grows
8:35AM ( 8 minutes ago )
The Latest: Trump meets Macron in France
President Donald Trump and French President Emmanuel Macron are meeting in Caen on the northern coast of France not far from the Normandy American Cemetery where they marked the 75th anniversary of D-Day
8:27AM ( 16 minutes ago )
After Fed, Europe also helps economy cope with trade war
The European Central Bank has taken action to support the economy in the 19 countries that use the euro, responding to fears about global trade conflicts
8:17AM ( 26 minutes ago )
The Latest: Women's semifinals moved to neighboring courts
The Latest at the French Open: Women's French Open semifinal matches will be held on Courts Suzanne Lenglen and Simonne Mathieu
8:12AM ( 31 minutes ago )
Huawei warns US hurting itself with tough tech policy
A senior executive for Chinese technology giant Huawei says he is hoping the company's animosity with the United States will be resolved and warned that the U.S. will be shooting itself in the foot if it were to shun Chinese technology
8:08AM ( 35 minutes ago )