US worker productivity fell sharply in the second quarter and on an annual basis posted a record decline, the Labor Department said on Tuesday.
Nonfarm productivity, which measures hourly output per worker, fell at 4.6 per cent annualised rate last quarter, after having declined by 7.4 per cent in the first three months of the year, the report showed.
Economists polled by Reuters had expected productivity would decline at a 4.7 per cent rate in the April-June period.
Productivity fell at 2.5 per cent pace from a year ago.
Large shifts in the composition of the workforce in the wake of the Covid-19 pandemic have made it harder to measure underlying productivity growth, which some economists put at about 1.0 per cent or less, making the Federal Reserve's fight against inflation more difficult.
Hours worked increased at a 2.6 per cent rate in the second quarter.
Unit labour costs - the price of labour per single unit of output - accelerated at a 10.8 per cent rate. That followed a 9.3 per cent expansion rate in the first quarter.
Unit labour costs increased at a 9.5 per cent rate from a year ago. An acute shortage of workers is boosting wage growth. There were 10.7 million job openings at the end of June.
Hourly compensation rose at a 5.7 per cent rate in the second quarter. Compensation increased at a 6.7% rate compared to the second quarter of 2021. REUTERS