Productivity falls during the first quarter

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The productivity of U.S. workers dropped during the first quarter for the first time in a year as companies hired workers faster than they could increase the volume of goods and services they produced, according to msnbc.com.

The 0.5 percent decrease in productivity was the first decline since a 0.3 percent drop in the second quarter of 2011 and largest decline since a 1 percent drop at the beginning of 2011. Economists expect productivity growth to remain weak this year.

When employers cut their payrolls during the recession in 2007, productivity gained steadily as employers squeezed more output from fewer workers. The gains were a result of investment in efficient technologies, as well as employees working harder and putting in more hours because they were afraid of losing their jobs.

However, it appears employers have gotten as much work as they can from existing employees and have had to hire people to increase output.

During the first quarter, employers added about 635,000 new jobs to their payrolls.

5/4/2012

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