US productivity slows further in first quarter

WASHINGTON, May 7 (Reuters) - U.S. worker ​productivity growth ⁠slowed further in the ​first quarter, but a reversal was likely as businesses invest ​heavily ‌in artificial intelligence.

Nonfarm productivity, which measures hourly output per worker, ⁠increased at 0.8% annualized rate ⁠last quarter, the Labor ​Department's Bureau of Labor Statistics said on Thursday.

Data for the fourth quarter was revised down to show productivity ​growing ‌at a 1.6% rate instead of the previously reported 1.8% pace. The pace has cooled since the 5.2% surge in the third quarter. Economists ​polled by Reuters had forecast productivity increasing at a ‌1.0% rate.

Productivity grew at a 2.9% rate from a year ago. Economists believe ‌the adoption of AI will boost productivity and rein in labor costs.

Unit labor costs - the price of labor ​per single unit of output - increased at a 2.3% rate ‌last quarter. Fourth-quarter productivity growth was revised higher to a 4.6% pace from the previously reported 4.4% rate.

Economists had ⁠expected ⁠unit labor costs to increase ‌at a 2.6% rate last quarter. They grew at a 1.2% ​rate from ​a year ago. Hourly compensation increased ‌at a 3.1% rate last quarter and grew at a 4.2% pace from a year ago. (Reporting by Lucia Mutikani, Editing by Nick Zieminski)