US labour productivity increases more than expected in the second quarter

The preliminary data from the U.S. Labour Department showed Wednesday that labour productivity in the United States rose 0.9 percent q-o-q in the second quarter, as output boosted 3.4 percent q-o-q and hours worked increased 2.5 percent q-o-q (seasonally adjusted). That exceeded economists' forecast for a 0.7 percent q-o-q gain after initially reported flat performance in the first quarter. The first quarter reading was revised to +0.1 percent. In y-o-y terms, the labor productivity rose 1.2 percent in the second quarter, reflecting a 2.7-percent surge in output and a 1.5-percent increase in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the second quarter rose 0.6 percent compared to a 5.4 percent q-o-q growth in the prior quarter (revised from +2.2 percent). Economists had forecast a 1.2 percent gain in second-quarter unit labor costs. Unit labor costs quarterly growth reflected a 1.6-percent q-o-q increase in hourly compensation and a 0.9-percent q-o-q gain in productivity. Compared to the corresponding period of 2016, unit labor costs fell 0.2 percent.