Productivity Falls for First Time in 2 Years; Some Economists Say Quarterly Decline May Not Reverse Trend
The productivity of U.S. workers dropped for the first time in two years during the first three months of the year, the Labor Department reported yesterday.</br></br>The decline burst a bubble of increasing productivity that had many economists wondering whether U.S. gains in economic efficiency were moving to a higher track.</br></br>"It's disappointing, but we had such a phenomenal string of gains that some setback was expected," said economist Stephen S. Roach of Morgan Stanley & Co. in New York, according to the Associated Press. "I'm convinced we're on a path of higher productivity growth in the 1990s."</br></br>Productivity at American businesses - the amount of goods and services produced for each hour worked - fell at an annual rate of 1.5 percent in the first three months of the year, the department said in revising an earlier report.</br></br>The department had earlier estimated that overall business productivity grew at a 0.1 percent rate in the first quarter.