WASHINGTON, May 5 (Reuters) - U.S. nonfarm productivity growth slowed in the first quarter, suggesting companies may soon find it harder to extract more output from their current pool of w 536870914 1869769573
Productivity increased at a 1.6 percent annual rate, the Labor Department said on Thursday, braking from a 2.9 percent pace in the fourth quarter. However, the growth pace was above econo 536870913 1835627380
While the step back in productivity was flagged by a sharp pull back in economic growth in the first quarter, it also suggested that businesses probably have little room to continue with 1668248436
Productivity -- which measures hourly output per worker -- rose rapidly in the past two years, peaking at an 8.9 percent rate in the second quarter of 2009. Businesses are estimated to be 536870913 544434548
The economy grew at a 1.8 percent pace in the first three months of this year after expanding at a 3.1 percent rate in the fourth quarter.
The productivity report showed a rebound in unit labor costs, which rose at a 1 percent rate in the first quarter after declining 1 percent in the prior period. Despite the rise in labor 1668248436
High food and energy prices have stoked inflation fears, but Federal Reserve officials see limited scope for a broad pick up in price pressures.
Economists had expected unit labor costs to rise at a 0.8 percent rate in the first quarter. During the first quarter, output rose at a 3.1 percent rate, moderating from 4.4 percent pace i 536870913 1847620712 (Reporting by Lucia Mutikani; Editing by Neil Stempleman)