US productivity slows further in first quarter

WASHINGTON, May 7 (Reuters) - ‌U.S. worker ​productivity ​growth slowed further in the first quarter, but a reversal was likely as ‌businesses invest heavily in artificial intelligence.

Nonfarm productivity, which ⁠measures hourly output per worker, increased at 0.8% annualized ‌rate last quarter, the ‌Labor Department's Bureau of Labor Statistics said on Thursday.

Data for the fourth quarter was revised ​down to show productivity growing at a 1.6% rate instead of the previously reported 1.8% ⁠pace. The pace has cooled since the 5.2% surge in the ​third quarter. Economists polled by Reuters had forecast productivity increasing at a 1.0% rate.

Productivity ​grew at a 2.9% rate ‌from a year ago. Economists believe the adoption of AI will boost productivity ⁠and rein in labor costs.

Unit labor costs - the price of labor per single unit of output - increased at ⁠a 2.3% rate last quarter. Fourth-quarter productivity growth was ​revised higher to a 4.6% pace from the previously reported 4.4% rate.

Economists had expected unit labor costs to increase ‌at a 2.6% rate last quarter. They grew at a 1.2% rate from ‌a year ago. Hourly compensation increased at a ⁠3.1% rate last ‌quarter and grew ​at a 4.2% pace from a year ago.

(Reporting by Lucia Mutikani, Editing by Nick ‌Zieminski)

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