U.S. companies squeezed more work out of their staffs in the first three months of the year, but the gain in productivity was much slower than the previous three months.

Productivity rose at an annual rate of 1.6 percent in the January-March period, compared with a 2.9 percent increase in the previous quarter, the Labor Department reported Thursday. Labor costs rose at a 1 percent annual rate in the January-March period after falling 1 percent in the previous three months.

A slowdown in productivity growth is bad for the economy if it persists for a long period. But it can be good in the short term when unemployment is high because it signals companies must hire more workers in order to make further gains.

 

Cadbury deal hurts Kraft’s first-quarter net income

Kraft Foods Inc.’s first-quarter net income dropped sharply on costs related to its acquisition of candy maker Cadbury, but its adjusted profit rose and beat expectations.

The company earned $799 million, or 45 cents per share, for the quarter. That’s down from $1.89 billion, or $1.16 per share, a year earlier.

 

As credit card use rises, Visa sees jump in profits

Visa Inc. on Thursday said that its fiscal second-quarter profit leaped 24 percent, as consumers used their credit and debit cards more often in the U.S. and abroad.

The company reported net income of $881 million, or $1.23 per share, for the three months ended March 31. That compared with earnings of $713 million, or 96 cents per share, for the year-earlier period.

Revenue rose 15 percent to $2.25 billion, from $1.96 billion a year ago.

 

Fixed mortgage rates dip to lowest level of the year

Fixed mortgage rates dipped to the lowest level of the year this week. The third straight weekly decline comes at the start of the peak buying season.

Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.71 percent from 4.78 percent the previous week. That matched this year’s low reached in January. But it is above the 40-year low of 4.17 percent hit in November.

The average rate on the 15-year fixed mortgage slipped to 3.89 percent from 3.97 percent.

 

Gap fires design director as slow sales persist

Gap Inc. has ousted Patrick Robinson, the design director for its namesake brand. The announcement Thursday came as the clothing seller cut its first-quarter earnings outlook.

The company, based in San Francisco, says it is searching for a successor.

Pam Wallack, who became head of the newly established Gap Creative Center three months ago, made the call to dismiss Robinson and will manage the design teams in the interim.

Robinson had been executive vice president of Gap Global Design for Adult and Body for four years.

His departure follows a series of management and organizational changes aimed at reviving sales that have long sagged.

In February, the company appointed Art Peck, who had been the head of the outlet center, as president of the Gap brand. He replaced Marka Hansen, who had been at the brand’s helm since February 2007. Peck is the fifth president to lead the Gap brand in nine years.

The Gap brand has suffered an annual drop in a key revenue measure in North America for six straight years, including 2010. The retailer also operates Banana Republic and Old Navy stores, both of which are on the mend.