Labor costs contained in first quarter, data indicate

[Omaha Steve]

http://www.marketwatch.com/news/story/us-productivity-remains-healthy-first/story.aspx?guid=%7BFA2E8D20-EDB8-449E-BBAF-69A43D5AD540%7D&dist=msr_6

By Greg Robb, MarketWatch
Last update: 11:46 a.m. EDT June 4, 2008

WASHINGTON (MarketWatch) -- Productivity in the U.S. economy remained at a healthy level in the first quarter and labor costs were contained, government data showed Wednesday.

Revised data showed productivity growth in the U.S. workplace increase at a slight faster pace during the first quarter -- a 2.6% annual growth rate, up from the 2.3% estimated a month ago -- as output accelerated in line with the recent upward revision to growth in the nation's gross domestic product during the first three months of the year.

Productivity in the nonfarm business sector is up 3.3% over the past four quarters, marking the fastest pace since the final three months of 2004.

Meanwhile, first-quarter unit labor costs -- a key gauge of inflationary pressures spawned by labor markets -- were revised lower, down to a 2.2% annualized rate from 2.3% earlier.

Unit labor costs are up 0.7% in the past year, the slowest pace since the fourth quarter of 2004.
The Labor Department's revisions were close to expectations of Wall Street economists. See Economic Calendar.
Doves on the Federal Reserve have pointed to low labor costs as one bright spot among a backdrop marked by higher prices for gasoline and food.

FULL story at link.