U.S. worker productivity grew at a slower pace in the first quarter than originally thought, continuing a sluggish trend that threatens the Trump administration’s target for economic growth.

The Labor Department reported Wednesday that the January-March productivity increase had been revised down to 0.4% from the 0.7% gain initially estimated a month ago.

Output — or goods and services produced — climbed 2.7% instead of 2.8%, while hours worked were revised to show a 2.3% gain versus a preliminary 2.1%.

The downward revision in productivity “stemmed from workers producing fewer goods and services than originally estimated in a greater period of time, as productivity rises when workers supply more goods and services in the same amount of time or less,” The Wall Street Journal said.

Economists surveyed by the Journal had expected first-quarter productivity to rise at a 0.6% rate. From a year earlier, worker productivity advanced 1.3% — consistent with the sluggish 1.2% average annual rate recorded from 2007 to 2017, and well below the better than 2% annual average recorded since the end of World War II.

Productivity dropped sharply in the manufacturing sector in the first quarter, falling 1.2% from an earlier estimate of 0.5% growth.

“Productivity is the key determinant of an economy’s long-term health and prosperity, and productivity gains are key to companies’ profit margins,” the WSJ said. “Without stronger productivity, achieving the 3% growth rate President Donald Trump has set as a goal becomes more difficult, especially as a tight labor market makes finding workers more difficult for employers.”

The Trump tax cuts and regulatory rollback are aimed at spurring businesses to boost spending and investment, ideally leading to higher productivity. But according to MarketWatch, “It’s too early to tell if the plan is working.”

The Labor Department’s report also reaffirmed that unit labor costs are rising moderately despite gradually increasing wages and higher prices for raw materials, growing at an annual rate of 1.3% in the first quarter.

“The recent trend in unit-labor costs is consistent with expectations for stable, low inflation,” said Ken Matheny of Macroeconomic Advisers.

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