May 2, 2013 / 12:46 PM / 4 years ago

Productivity growth modest in first quarter

Workers assemble a pre-production 2013 Dodge Dart during a tour of the Chrysler Belvidere Assembly plant in Belvidere, Illinois February 2, 2012.Frank Polich

WASHINGTON (Reuters) - Nonfarm productivity rose modestly in the first quarter as growth in output accelerated sharply and employers throttled back gains in the hours that their staffs worked.

Productivity increased at a 0.7 percent annual rate, the Labor Department said on Thursday. Economists polled by Reuters had expected productivity to gain at a 1.2 percent rate.

Productivity fell at a 1.7 percent rate in the fourth quarter, according to revised figures.

Output rose at a 2.5 percent rate in the first quarter after weak government spending held the economy to marginal growth in the last three months of 2012. The growth rate for the number of hours worked, however, slowed to 1.8 percent in the first quarter.

Unit labor costs - a gauge of the labor-related cost for any given unit of output - rose at a 0.5 percent rate in the first three months of the year, just below forecasts of economists polled by Reuters.

Reporting by Jason Lange; Editing by Neil Stempleman

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