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U.S. Productivity Fell 0.9% in First Quarter as Growth Cooled

Bloomberg (06/06/12) Alex Kowalski

The productivity of U.S. workers dropped at the fastest pace in a year in the first quarter, the U.S. Department of Labor reported today, indicating companies may pause before bringing on new employees. Nonfarm productivity decreased at a 0.9% annual pace, faster than the initial estimate of an annual rate of decline of 0.5%. The drop in productivity at the beginning of the year helps explain why payroll gains in May were the weakest in a year. Slower U.S. growth combined with European economies on the verge of recession shows why companies may cut back worker hours and become more deliberate in their hiring.