Productivity Slows; Inflation Heats Up

Workplace productivity slowed from January through March, but analysts said it still was growing more quickly than in many earlier economic cycles. A key measure of inflation posted the biggest advance in two years.

The Labor Department said Tuesday that first-quarter seasonally adjusted non-farm productivity slowed from a revised 4 percent annual rate in the final three months of 1994, when it initially was estimated at 1.7 percent, to 0.7 percent.

It had gained 3.2 percent from July through September after dropping 2.1 percent the previous quarter, the first decline since the first three months of 1993.

Unit labor costs - typically twothirds of the cost of a product - rose 3.4 percent during the JanuaryMarch period, highest since a 4.1 percent gain in the first quarter of 1993. Costs had dropped 0.1 percent in the third quarter and 0.6 percent in the fourth.