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An employee inspects the wheel well of a BMW X4 SUV at the BMW assembly plant in Greer, South Carolina.

U.S. nonfarm productivity fell more sharply than previously thought in the first quarter, leading to a jump in labor-related production costs, a trend that could spur a rapid increase in inflation.

Productivity dropped at a 3.1 percent annual rate instead of the previously reported 1.9 percent rate, the Labor Department said on Thursday. That was the first back-to-back fall in productivity since 2006.

Economists polled by Reuters had expected that productivity, which measures hourly output per worker, would be revised to show it falling at a 2.9 percent rate.