U.S. non-farm productivity grows 0.8% in first quarter

WASHINGTON, May 7 (Xinhua) -- Productivity in the U.S. non-farm business sector grew at an annual rate of 0.8 percent in the first quarter of 2009, better than the 0.6 percent gain that economists had estimated, the Labor Department reported Thursday.

The first-quarter reading for productivity, the amount of output per hour of work, also was better than the 0.6 percent decline in the fourth quarter of 2008.

While productivity increased, wage pressures eased in the January-March quarter. Employers' unit labor costs, or costs of wages and benefits for each unit of output, increased at an annual rate of 3.3 percent, compared with a 5.7 percent spike in the previous quarter.

The Commerce Department reported last week that the gross domestic product, the economy's overall output of goods and services, shrank 6.1 percent in the first quarter after plunging 6.3 percent in the fourth quarter, marking the worst six-month performance in a half century.

Productivity is considered the key ingredient needed for rising living standards because it allows companies to pay their workers more without having to raise the price of their products, which fuels inflation.