WASHINGTON D.C.: The Bureau of Labor Statistics reported that in the first quarter of 2022, worker productivity fell at its fastest pace in nearly 75 years, while labor costs rose due to the spread of COVID-19 in the U.S.

From January to March, “nonfarm productivity,” a measure of output against hours worked, declined by 7.5 percent, the fastest decrease since the third quarter of 1947.

Labor costs also surged 11.6 percent during the same period, meaning the increase over the past four quarters is 7.2 percent, the highest gain since the third quarter of 1982.

Wall Street already predicted a 5.2 percent decrease in productivity and a 10.5 percent increase in unit labor costs. Productivity fell 0.6 percent on a four-quarter basis, the largest decline since 1993.

Overall, these figures highlight the fastest inflation surge in the U.S. in more than 40 years, and Federal Reserve officials announced they would be raising interest rates half a percentage point to control inflation.

A separate Labor Department report release this week showed that for the week ending 30th April, jobless claims increased to 200,000, a 19,000 gain from the previous period and above the Dow Jones prediction of 182,000.

Continuing claims fell 19,000 to 1.38 million, the lowest level since 17th January, 1970.

While rising COVID-19 cases, runaway inflation and the Russian invasion of Ukraine also stifled activity, most economists expect the resumption of growth later in the year.

At his post-meeting news conference held this week, Fed Chairman Jerome Powell said that while the U.S. is still in a strong position, inflation must be controlled if the recovery is to remain strong.