The labor productivity of U.S. nonfarm business sector rose at a 0.7 percent annual rate from January through March, following a 1.7 percent decline in the previous quarter, the U.S. Labor Department reported on Thursday.

The gain in productivity reflected increases of 2.5 percent in output and 1.8 percent in hours worked in the first three months, the department said in a report.

Unit labor costs in nonfarm businesses rose 0.5 percent, as the increase in hourly compensation outpaced the growth of productivity.

In the first quarter, U.S. manufacturing sector productivity increased 3.8 percent as output rose 5.6 percent and hours worked increased 1.7 percent. Over the last four quarters, manufacturing productivity grew 1.7 percent.

Productivity measures the amount of output per hour of work. Increasing productivity can slow job creation because it means companies can get more out of their current staff without hiring more workers. Endi

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