The jump in productivity ¿ which is expressed as the amount of output per hour of work -- followed a strong 5.5% increase in the final three months of 2001, the U.S. Labor Department reported.

Productivity performance in the January-March quarter was better than many analysts expected. They were forecasting a 7% growth rate.

But the improvement came at a price. Businesses, responding to the lingering effects of last year's recession, cut back on their payrolls. That caused the total number of hours worked to fall at a rate of 1.9%. Output, however, rose at a solid 6.5 percent rate.

The first-quarter productivity gain marked the best showing since a 9.9% growth rate registered in the second quarter of 1983.

For the year ending in March, productivity rose 4.3% -- the biggest gain since the second quarter of 2000. Unit labor costs dipped by 0.9%.