Productivity Up 3.4%--Largest Gain in 2 Years

Productivity in non-farm American businesses surged ahead at a 3.4% annual rate in the first quarter of this year, the largest quarterly gain in two years, the Labor Department said today.

The surge in labor efficiency was a welcome rebound from a revised 4.1% decline in the last quarter of 1985, the steepest drop in four years.

Non-farm business productivity, generally the most reliable index of output per hour because it excludes the volatile agricultural sector, scored the best quarterly gain since the first quarter of 1984, when it rose 3.6%.