1Q Productivity Decline Revised Downward

U.S. workers’ first-quarter productivity fell more than originally estimated, the Labor Department said Wednesday.

The 0.9% decline—revised from an earlier 0.5% downturn — followed a 1.2% increase in the fourth quarter. For 2011, productivity rose at a 0.4% annual rate.

Productivity is a measure of how much an employee produces for every hour of work.

Economists had forecast a 0.8% decline, Bloomberg reported. Expenses per worker rose at a 1.3% rate, less than the 2% initially estimated.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.