US productivity fell to an annual rate of 2.8 percent for the first three months of the year, compared to the 3.6 percent rate the government announced one month ago. One interpretation of this result is that businesses have maximized the output potential of the current workforce, suggesting that companies may consider adding more workers in order to boost production.
Coincidentally, the Labor Department announced that the number of layoffs declined for a second straight week, falling by 10,000 to 453,000. While this is a positive sign, there is no question that the labor market still faces challenges as total unemployment remains near 10 percent.
Source: Associated Press
