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Economic Buzz: US labor productivity slows in first quarter as AI investment seen boosting future growth
08-May-2026 08:41
U.S. worker productivity slowed further in the first quarter, with nonfarm productivity ' which measures output per hour worked ' rising at an annualized rate of 0.8%, according to the Labor Department's Bureau of Labor Statistics.

The fourth-quarter productivity figure was revised down to 1.6% from the previously reported 1.8%. Productivity growth has steadily cooled since the sharp 5.2% jump recorded in the third quarter. On a yearly basis, productivity was up 2.9%.

Despite the slowdown, economists expect productivity to improve as businesses continue investing heavily in artificial intelligence.

Meanwhile, unit labor costs ' which measure the cost of labor for each unit of output ' increased at a 2.3% annualized rate in the first quarter. The fourth-quarter unit labor costs figure was revised higher to 4.6% from the previously reported 4.4%.

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