The Labor Department's second revision (link opens as PDF) of Q2 productivity and costs is out, and Americans were busier than previously expected.
Nonfarm business sector labor productivity growth clocked in at an annualized 2.3% for Q2, a significant increase over the previous 0.9% rate. Analysts were pleasantly surprised by the revision, having expected a milder increase to 1.8%.
Employers aren't keeping this quarter's productivity gains to themselves. Hourly compensation increased 2.3% alongside productivity, leaving unit labor costs unchanged for Q2. That equates to a major boost for efficiency when compared to previous estimates of a 1.4% increase in unit labor costs.
Source: BLS.gov
Slicing into sectors, manufacturing wasn't quite as lucky. Although productivity rose 1.9%, unit labor costs headed 2.3% higher. The lag in productivity was due to both a 2.4% drop in hours worked, as well as a 0.6% decrease in output.
Nonfinancial corporations led employer improvements, bumping up productivity 3.2%, as hourly compensation rose a smaller 2.3%. Combined, unit labor costs clocked in 0.9% lower for Q2.
