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Productivity Growth Slows in Spring

 
Associated Press
     

    The efficiency of America's workers grew at a slightly slower pace in the spring as companies sought to produce more with leaner work forces. Workers' compensation growth slowed, too.

    The Labor Department reported Friday that productivity -- the amount an employee produces for every hour on the job -- grew at an annual rate of 2.2% during the April-to-June quarter. That was down from a 2.6% growth rate logged in the first three months of this year.

    Economists were forecasting productivity to pick up slightly to a 2.7% pace.

    Meanwhile, growth in compensation -- wages and benefits -- also slowed as companies were less generous amid troubles in the economy and uncertainty about their own prospects.

    Unit labor costs slipped to a 1.3% pace in the second quarter, from a 2.5% growth rate in the first quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. Economists look to this barometer for clues about inflation.

    The showing on compensation matched economists' expectations.