WASHINGTON – U.S. worker productivity grew faster than initially thought in the second quarter, reining in labor costs, and suggesting that inflation pressures could continue to subside.
On Thursday, the Labor Department’s Bureau of Labor Statistics said that nonfarm productivity, which measures hourly output per worker, increased at a 2.5% annualized rate last quarter.
That was an upward revision from the 2.3% pace estimated last month. The upward revision was in line with economists’ expectations. Productivity increased at a 0.4% rate in the first quarter. It advanced at an unrevised 2.7% pace from a year ago.
Unit labor costs – the price of labor per single unit of output – rose at a 0.4% rate in the April-June quarter. That was revised down from the previously reported 0.9% pace.
Labor costs increased by 3.8% in the January-March quarter and at a 0.3 % rate from a year ago.
The Federal Reserve is expected to start cutting interest rates this month against the backdrop of cooling inflation and labor market conditions.
Compensation rose at a 3.0% rate last quarter, revised down from the previously estimated 3.3% pace. It advanced at a 3.1% rate from a year ago.
(Source: Reuters)
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
