The economy added just 175,000 jobs in April, marking a firm slowdown

A worker assembles a product at a manufacturing facility in Mount Pleasant, Pennsylvania, on January 30. Justin Merriman/Bloomberg/Getty Images/File

Productivity, which enables the economy to grow without rising inflation, is on the rise.

“[Productivity is] the secret sauce to sustainable expansion,” Nick Bunker, economic research director for North America at the Indeed Hiring Lab, told CNN.

However, Bunker, fellow economists and even Federal Reserve Chair Jerome Powell are still trying to get their arms around the extent of the productivity growth in the US.

“It’s a really important, but incredibly volatile, quarterly measure,” Bunker said.

The BLS on Thursday released a fresh batch of productivity data that showed productivity growth in the first quarter picked up by 0.3% from the fourth quarter of last year, falling below economists’ expectations for a 0.9% gain.

“Nonfarm business sector labor productivity growth was weaker in [the first quarter], but don’t forget this comes on the back of three consecutive quarterly [gains] of more than 3% — a rare feat that occurred once in the pre-Covid decade,” Gregory Daco, EY Parthenon chief economist, posted Thursday on X.

Unit labor costs, or how much a business pays its workers to produce one unit of output, soared well above expectations, with a 4.7% quarterly increase.

From the year before, productivity and unit labor costs are up 2.9% and 1.8%, respectively.