US business productivity growth accelerated unexpectedly in the first quarter, but labour costs picked up, according to a government report today.
Separately, the government said initial claims for jobless benefits climbed 11,000 to 333,000 last week, slightly above expectations on Wall Street.
Nonfarm business productivity, or output per worker hour, rose at a 2.6 per cent annual pace in the January-March period after gaining 2.1 per cent in the fourth quarter, the Labor Department said.
But unit labor costs, which economists eye closely to gauge inflation pressures, moved ahead at a 2.2 per cent pace, an acceleration from an upwardly revised 1.7 per cent fourth-quarter advance.
Financial markets largely ignored the productivity and jobless claims data as traders awaited a report on job creation due tomorrow for clearer clues on the health of the economy and likely direction of interest rates.
A big first-quarter jump in worker hourly compensation, which rose at a 4.8 per cent rate after a 3.8 per cent fourth-quarter gain, lay behind the acceleration in unit labour costs, the report showed.
Productivity rose more than 4 per cent in each of the last three years but has slowed to a range more in keeping with historical experience as the US economic expansion has matured and businesses have found a need to step up hiring.