U.S. nonfarm productivity fell at its fastest pace in a year in the first quarter as severe weather took its toll, leading to the largest gain in unit labor costs in more than a year.
Productivity declined at a 1.7 percent annual rate after advancing at a 2.3 percent pace in the fourth quarter, the Labor Department said on Wednesday. It was the biggest drop since the first quarter of 2013.
The fall in productivity, which measures hourly output per worker, was in tandem with a weather-driven sharp weakness in the economy during the January-March period. An unusually cold and snowy winter reduced hours for some workers.
Economists polled by Reuters had forecast productivity falling at a 1.0 percent rate.
First-quarter gross domestic product rose at a 0.1 percent annual rate, the government said in its advance estimate last week, abruptly slowing from the fourth quarter's 2.6 percent rate.