U.S. productivity in the second quarter was raised to a 3.3% annual pace from an original 1.3%, reflecting an earlier revision in gross domestic product that showed the economy was much stronger in the spring than initially reported. The gain in productivity was the biggest since the end of 2013, though it's still rising more slowly than usual. Over the past year productivity has risen a scant 0.7%. The number of hours employees worked in the second quarter was trimmed a hair to 1.4% from 1.5%. Yet the output of goods and services increased by a much faster 4.7% annual rate instead of preliminary 2.8%, the Labor Department said Wednesday. Unit-labor costs fell by 1.4% instead of rising 0.5%, showing that businesses are still keeping a tight lid on expenses. The increase in hourly compensation for all workers was unchanged at 1.8%, but pay fell 1.1% in the second quarter in real or inflation-adjusted terms. Real compensation is up 2.4% from a year earlier, however.
Copyright © 2015 MarketWatch, Inc.
Continue Reading Below