Aug 9 (Portal) – US worker productivity fell in the second quarter on an annualized basis since 1948, when the Labor Department began tracking it, while unit labor cost growth accelerated, suggesting that the strong Wage pressures will continue to help keep inflation elevated.
Nonfarm productivity, which measures hourly output per worker, fell 2.5% from a year earlier, the department said on Tuesday. It also fell sharply in the second quarter, at an annualized rate of 4.6%, after being revised upwards by 7.4% in the first three months of the year.
Economists polled by Portal had expected productivity to fall 4.7% in April-June.
Big shifts in the composition of the US workforce amid the COVID-19 pandemic have made it harder to measure underlying productivity growth, which some economists put at around 1.0% or less, fueling the Federal Reserve’s fight against the inflation more difficult.
Workers smooth the poured mix of a slab at the factory of IceStone, a manufacturer of recycled glass countertops and surfaces, in New York City, New York, U.S., June 3, 2021. Portal/Andrew Kelly
Hours worked increased 2.6% in the second quarter.
Unit labor costs – the price of labor per unit of output – rose by 10.8%. This was followed by a growth rate of 12.7% in the first quarter.
Unit labor costs rose by 9.5% year-on-year. An acute labor shortage is boosting wage growth. At the end of June there were 10.7 million job offers.
Hourly wages increased 5.7% in the second quarter and 6.7% compared to the second quarter of 2021.
Reporting by Dan Burns and Lindsay Dunsmuir; Editing by Mark Porter and Paul Simao
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