US non-agricultural productivity fell 7.5% in the first quarter, the largest drop since the third quarter of 1947; unit labor costs rose 11.6%, the highest since 1982.
Separately, initial jobless claims rose 1.9 to 200,000 last week, beating expectations for 180,000.
Economic data was mixed, and U.S. stocks retreated sharply on Thursday, erasing yesterday's gains.
The Dow fell more than 1,100 points, while the Nasdaq tumbled 5%.
The 10-year U.S. Treasury yield soared to 3.09 percent, the highest since 2018.
[23:55] The Nasdaq fell 5%
The Dow was at 32,947 points, down 1,113 points or 3.27%; the benchmark index was at 4,137 points, down 162 or 3.78%; the Nasdaq Composite was at 12,317 points, down 647 points or 4.99%.
[23:15] The Dow fell more than 1,000 points
The Dow was at 33,058 points, down 1,002 points or 2.94%; the benchmark index was at 4,152 points, down 147 or 3.44%; the Nasdaq Composite was at 12,372 points, down 592 points or 4.57%.
[22:50] The Dow's decline expanded
The Dow's decline expanded to more than 860 points, nearly erasing the previous day's nearly 1,000-point gain; the S&P fell 3%; the Nasdaq fell more than 4%.
[22:00] U.S. stocks retreated on Thursday
The Dow closed up more than 932 points, or 2.81%, in the previous session after Federal Reserve Chairman Jerome Powell ruled out the possibility of raising interest rates by 0.75% in one go.
However, dragged down by worse-than-expected economic data, US stocks retreated on Thursday. After the Dow fell more than 300 points in the early part, the decline expanded to more than 525 points or 1.8%; the S&P 500 and the Nasdaq fell 2% and 3% respectively.