US productivity rose 0.7% in the first quarter, vs 0.9% increase expected

Balint Porneczi | Bloomberg | Getty Images

A worker checks the mechanical operation of a new aircraft seat during assembly at the Zodiac Seats France plant, operated by Zodiac Aerospace, in Issoudun, France.

U.S. worker productivity increased modestly in the first quarter, and a jump in compensation supported views that inflation pressures were building up.

The Labor Department said on Thursday nonfarm productivity, which measures hourly output per worker, rose at a 0.7 percent annualized rate in the January-March quarter.

Fourth-quarter productivity was revised to show it increasing at a pace 0.3 percent instead of being unchanged as previously reported. Compared to the first quarter of 2017, productivity increased at a rate of 1.3 percent.

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