US second-quarter productivity revised lower

[WASHINGTON] US worker productivity grew a bit more slowly than initially thought in the second quarter, the Labor Department said on Thursday.

Nonfarm productivity, which measures hourly output per worker, increased at a downwardly revised 2.1 per cent annualised rate last quarter. It was previously reported to have advanced at a 2.3 per cent pace. Economists polled by Reuters had expected productivity would be raised to a 2.4 per cent rate.

Productivity grew at a 4.3 per cent rate in the January-March quarter. It surged early in the pandemic before slumping in the final three months of 2020. Economists attributed the jump to the hollowing out of lower-wage industries, such as leisure and hospitality, which they said tended to be less productive.

Compared to the second quarter of 2020, productivity increased at a 1.8 per cent rate.

Hours worked increased at a 6.0 per cent rate last quarter, revised up from the 5.5 per cent pace estimated last month.

Unit labour costs - the price of labour per single unit of output - grew at a 1.3 per cent rate. They were previously reported to have climbed at a 1.0 per cent pace in the second quarter. Unit labour costs fell at a 2.8 per cent rate in the first quarter.

They advanced at a 0.2 per cent pace from a year ago, instead of rising at a 0.1 per cent rate as previously reported.

Unit labour costs have also been distorted by the pandemic's disproportionate impact on lower-wage industries.

Hourly compensation increased at a 3.4 per cent rate last quarter, rather than the previously reported 3.3 per cent pace. That followed a 1.4 per cent growth pace in the first quarter.

Compensation increased at an unrevised 2.0 per cent rate compared to the second quarter of 2020.

REUTERS