Labor productivity increased by more than expected in the first
three months of the year, according to a report released by the Labor
Department on Thursday, although the report also showed a bigger than
expected increase in labor costs.

The report showed that
productivity rose 0.8 percent in the first quarter following a revised
0.6 percent decrease in the fourth quarter. Economists had expected
productivity to rise 0.6 percent compared to the 0.4 percent decrease
originally reported for the previous quarter.

At the same time,
the Labor Department said that unit labor costs increased by 3.3
percent in the first quarter after surging up by an unrevised 5.7
percent in the fourth quarter. The increase exceeded economist
estimates of a 2.7 percent increase.