The productivity of US workers rebounded at a rapid pace at the start of this year, and wages posted a solid gain as well, the government reported today.
The Labor Department said that productivity, the key factor in rising living standards, rose at an annual rate of 3.7 per cent in the January-March quarter, better than the 3.2 per cent increase initially estimated a month ago.
Salaries and benefits per unit of output rose by 1.6 per cent after having fallen by 0.6 per cent in the fourth quarter.
In other economic news, the number of newly laid off workers filing claims for unemployment benefits unexpectedly increased to 336,000 last week, a gain of 7,000 from the previous week.
The increase in weekly claims pushed the four-week moving average for claims up to 333,500 from 330,750 the previous week. That was the highest level for the four-week average since last October.
Even with this slight rise, the expectation is that Friday's unemployment report will show a healthy labour market with the number of jobs created rebounding to around 170,000, up from a disappointing 138,000 job gain in April. The unemployment rate is expected to hold steady at 4.7 per cent.
The increase in productivity represented a big rebound after productivity had fallen at an annual rate of 0.3 per cent in the fourth quarter. It was the best quarterly showing since a 4.2 per cent productivity increase in the third quarter of 2005.