ECONOMY : U.S. Productivity Down; Jobless Claims Flat : Economy: First-quarter output dip ends a two-year run-up. Experts disagree on what it means.

The productivity of American workers during the first quarter fell for the first time in two years, renewing debate over whether recent improvements were temporary or represented a trend.

Meanwhile, the number of first-time claims for unemployment benefits was unchanged last week, leaving analysts to differ over prospects for job growth.

New applications for unemployment insurance totaled 344,000 last week for the second straight week, the Labor Department said Thursday. Claims for the week ended June 5 were revised downward from an initial estimate of 347,000.

Analysts had various interpretations of the productivity report.

“It’s disappointing, but we had such a phenomenal string of gains that some setback was expected,” said economist Stephen S. Roach of Morgan Stanley & Co. in New York. “I’m convinced we’re on a path of higher productivity growth in the 1990s.”

Mark Zandi, economist with Regional Financial Associates in West Chester, Pa., disagreed.

“This number indicates that what we saw last year was just a temporary cyclical pickup and not a longer-term shift in productivity,” he said. “It’s likely that productivity will resume in the second quarter. . . . (but) on a relatively slow level.”

The Labor Department said non-farm productivity--defined as output per number of hours worked--plunged at a seasonally adjusted annual rate of 1.6% from January through March. The drop was much bigger than the 0.1% decline in the department’s initial estimate last month.

Economists say increased productivity is essential to improving living standards and making American products more competitive overseas.

“When (productivity) is growing, our living standards are rising,” Zandi said. “When it is stagnant, we are not seeing any improvement.”

Productivity had risen at a 4.7% rate during the last three months of 1992, pacing a 2.6% annual increase, the best in 20 years.

The decline was the first since a 0.7% dip in the first quarter of 1991--the final three months of the recession--and the biggest since a 2.1% plunge in the third quarter of 1990, when the recession began.

Productivity rose at an annual rate of less than 1% during the 1970s and 1980s, down sharply from an average annual rate of 2.5% during the previous two decades.