Productivity in U.S. Rises More Than Forecast as Output Grows
The productivity of U.S. workers rose more than projected in the second quarter as the world’s largest economy expanded output. The measure of employee output per hour increased at a 0.9 percent annualized rate, after a 1.7 percent decline in the prior three months, a Labor Department report showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.6 percent advance. Expenses per worker rose at a 1.4 percent rate, greater than estimated. The estimates of 57 economists surveyed by Bloomberg ranged from a productivity decline of 2.5 percent to a gain of 2.3 percent.
Even with the second-quarter pickup, productivity was unchanged in the 12 months ended in June, below the average 2.4 percent annual gain in the 2000-2011 period, the report showed. Businesses are reaching the limit of how much efficiency they can squeeze from their existing staff, a sign they may take on more workers once they see faster sales.
Output climbed 2.6 percent in the second quarter, and was revised down to a 0.3 percent decline in the first quarter. Labor expenses dropped 4.2 percent in the first quarter, compared with 4.3 percent decline previously estimated.
Unit labor costs, which are adjusted for efficiency gains, were forecast to rise 1.2 percent, the Bloomberg survey median showed.
Adjusted for inflation, hourly earnings rose at a 2.3 percent rate in the second quarter, after plunging 7.3 percent in the prior quarter. Hours worked rose at a 1.7 percent pace in the second quarter, and compensation for each hour worked climbed at a 2.3 percent annual pace.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
225-342-0013
jbroussard@treasury.state.la.us
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