Q2 Productivity Up 0.9%, Labor Costs Up 1.4%

Americans are working more for more money, according to a Q2 Productivity and Costs report (link opens in PDF) released today by the Labor Department.

Nonfarm business sector labor productivity increased an annualized 0.9% for the second quarter, driven primarily by a Q/Q 2.6% boost in output and a 1.7% bump in the number of hours worked. After dropping off a revised 1.7% in Q1, analysts had expected a slightly smaller 0.6% comeback. 

Productivity measures output per hour of work. Weak productivity suggests that companies may have to hire because they can't squeeze more work from their existing employees -- that is, if demand for a company's products is growing.

Productivity growth has been weaker recently, rising 1.5% in 2012 and 0.5% in 2011. Annual productivity growth averaged 3.2% in 2009 and 3.3% in 2010. In records dating back to 1947, it's been about 2%.

While productivity made gains for Q2, labor costs managed to increase at an even faster 1.4% rate. The 0.9% increase in productivity was accompanied by a 2.3% bump in average hourly compensation. With Q1's revised labor costs down a significant 4.2%, analysts also underestimated Q2's labor cost growth at just 1%. 

Source: bls.gov. 

For manufacturing, productivity increased 2.7%, while labor costs headed 1.4% higher.

Comparing this quarter to Q2 2012, overall productivity remains unchanged, while unit labor costs are up 1.6%. 

-- Material from The Associated Press was used in this report.

link


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2598439, ~/Articles/ArticleHandler.aspx, 4/23/2014 12:32:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement