Productivity Rises in First Quarter

U.S. workers’ productivity rose 0.7% in the first quarter, the Labor Department reported Thursday.

The measure of employee output per hour had declined 1.7% in the fourth quarter of last year.

Economists had predicted  a 1% increase in the first quarter, Bloomberg News reported.

Labor costs rose 0.6% from the first quarter of last year but fell 2% from the fourth quarter.

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.