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May 07, 2014 AT 6:59 AM
U.S. productivity fell in the first quarter while labor costs rose, reflecting the economic slowdown caused at the start of the year by harsh winter weather. The Labor Department says productivity declined at an annual rate of 1.7% in the January-March period, after growing at a 2.3% rate in last year's fourth quarter. The falling productivity coupled with a slight increase in hourly compensation led to labor costs rising 4.2% in the first quarter. Labor costs had fallen in the previous two quarters.