US Second-Quarter Productivity Revised Upward, According to Reuters

U.S. Worker Productivity Exceeds Expectations in Q2

WASHINGTON – U.S. worker productivity has shown stronger growth than previously estimated for the second quarter, helping to rein in labor costs and indicating that inflationary pressures may continue to ease.

According to the Labor Department’s Bureau of Labor Statistics, nonfarm productivity—measured as hourly output per worker—rose at an annualized rate of 2.5% last quarter. This figure was revised upward from the 2.3% pace reported earlier. The adjustment aligns with economists’ forecasts. In the first quarter, productivity increased at a rate of 0.4% and advanced by 2.7% compared to the same period last year.

Unit labor costs, which reflect the expense of labor per unit of output, grew at a rate of 0.4% from April to June, a significant downward revision from the earlier estimate of 0.9%. In contrast, labor costs had risen by 3.8% in the January to March quarter and by 0.3% year-over-year.

The Federal Reserve is anticipated to begin cutting interest rates this month, driven by signs of cooling inflation and labor market conditions. Meanwhile, compensation for workers increased at a 3.0% rate in the last quarter, revised down from an earlier estimate of 3.3%, and it rose by 3.1% compared to a year ago.