WASHINGTON — Worker productivity increased at a faster pace in the first three months of this year than previously estimated, wage pressures moderated and an important measure of business activity showed the service sector skirted recession in May.
The Labor Department reported Wednesday that productivity rose at an annual rate of 2.6 percent from January through March — faster than the government’s first estimate of 2.2 percent a month ago.
Wage pressures eased from 2007’s final quarter.
Labor costs rose at an annual rate of 2.2 percent in the first quarter, compared with a 4.7 percent surge late in 2007. The nonmanufacturing index, which covers 80 percent of the economy, stood at 51.7 in May — better than expected.
A reading above 50 indicates that service companies, where most people in the U.S. work, are expanding activity despite a prolonged slump in housing, a severe credit crunch, soaring energy costs and plunging consumer confidence. The Associated Press
