U.S. Labor Productivity Shows Substantial Increase In Q2
15 August 2018 - 12:13PM
RTTF2
A report released by the Labor Department on Wednesday showed
labor productivity in the U.S. spiked by more than expected in the
second quarter, while unit labor costs unexpectedly decreased.
The Labor Department said productivity shot up by 2.9 percent in
the second quarter after rising by a revised 0.3 percent in the
first quarter.
Economists had expected productivity to jump by 2.3 percent
compared to the 0.4 percent increase that had been reported for the
previous quarter.
The sharp increase in productivity, a measure of output per
hour, came as output soared by 4.8 percent and hours worked climbed
by 1.9 percent.
The report also said unit labor costs fell by 0.9 percent in the
second quarter after surging up by a revised 3.4 percent in the
first quarter.
Labor costs had been expected to rise by 0.3 percent compared to
the previously reported 2.9 percent spike in the first quarter.
The unexpected pullback in unit labor costs came as a 2.0
percent jump in hourly compensation was offset by the sharp
increase in productivity.
The Labor Department said real hourly compensation, which takes
changes in consumer prices into account, rose by 0.3 percent in the
second quarter after edging up by 0.2 percent in the first
quarter.
Compared to the same quarter a year ago, productivity was up by
1.3 percent in the second quarter, as output jumped by 3.5 percent
and hours worked increased by 2.2 percent.
Andrew Hunter, U.S. Economist at Capital Economics, noted the
annual productivity growth was exactly in line with the average
annual gain between 2007 and 2017.
"That second-quarter gain was the biggest in almost four years
but, for those keeping score, there were five quarters with faster
productivity growth during the Obama presidency," Hunter said. "All
that really tells us, however, is that quarterly productivity
growth tends to be quite volatile."
Unit labor costs were up by 1.9 year-over-year in the second
quarter amid a 3.2 percent surge in hourly compensation. Real
hourly compensation was up just 0.5 percent year-over-year.
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