US productivity grew at solid 3.4% rate in first quarter

US productivity grew at solid 3.4% rate in first quarter
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WASHINGTON — U.S. productivity grew at a strong 3.4% rate in the January-March quarter, the best showing in more than four years. It is an encouraging sign that productivity may finally be improving after a long stretch of weakness.

The first quarter gain was more than double the 1.3% increase in the fourth quarter, although it was slightly lower than an initial estimate of 3.6% made a month ago. Labor costs fell during the first quarter, declining by 1.6% following a 0.4% drop in the fourth quarter.

Productivity, the amount of output per hour of work, is a key factor determining an economy’s growth potential. If the current rebound continues, it would provide support for President Donald Trump’s efforts to achieve sustained 3% growth rates.

Martin Crutsinger, The Associated Press

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