WASHINGTON--The productivity of U.S. workers grew mildly in April
through June, reflecting a slow improvement in the overall economy.
Nonfarm business productivity, the output per hour of all workers,
rose at a 1.6% annual rate in the second three months of 2012, the
Labor Department said Wednesday. Unit labor costs were up 1.7% during
the period.
The productivity acceleration was just above expectations. Economists
surveyed by Dow Jones Newswires had forecast that productivity would
rise 1.3% in the quarter and labor costs would rise 0.6%.
The increase in productivity reflects a modest improvement in output
as hours worked barely grew.
Unit labor costs rose because hourly compensation grew faster than
productivity. Increasing labor costs can be a drag on corporate
profits.
Compensation improvements could be a reflection of a stronger
employment market. U.S. employers stepped up hiring in July, with
payrolls increasing by a seasonally adjusted 163,000 jobs last month,
the Labor Department said Friday. But unemployment, which is
calculated using a different survey of U.S. households, rose one-tenth
of a% to 8.3%.
Wednesday's report showed overall nonfarm business output rose 2.0%,
compared to 2.7% in the first quarter. Hours worked increased 0.4%,
versus a 3.2% gain in January through March.
Those modest improvements are in line with an economy that grew at a
1.5% rate in the second quarter, as the Commerce Department said last
month. Growth slowed from the first quarter as the pace of consumer
spending eased and state and local governments continued to cut their
budgets.
In the first three months of the year, productivity declined to a 0.5%
annual rate and labor costs were up 5.6%, according to revised data
released Wednesday.
First quarter unit labor costs grew primarily because of a large
upward revision to hourly compensation, the Labor Department said.
The report showed an increase in the manufacturing sector's
productivity, with a 0.2% rise in the second quarter as output grew
1.7%% and hours worked rose 1.4%. Those figures show productivity in
the sector slowed from the 5.5% rate in the first quarter, according
to revised data.
The Labor Department report on productivity can be accessed at:
http://bls.gov/lpc.
By Sarah Portlock at sarah.portlock@dowjones.com and Eric Morath at
eric.morath dowjones.com.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 08, 2012 09:05 ET (13:05 GMT)
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