WASHINGTON (AP) – The productivity of American workers rose just modestly in the spring, extending a worrisome issue that has persisted throughout this expansion.
Productivity grew at an annual rate of 0.9 percent in the April-June quarter, slightly better than a scant 0.1 percent rate of increase in the first quarter, the Labor Department reported Wednesday. Labor costs edged up at a 0.6 percent rate in the second quarter, a sharp slowdown from a 5.4 percent growth rate in the first quarter.
Productivity, the amount of output per hour of work, has been weak throughout the economic recovery, now in its ninth year. Many analysts say the issue is the biggest economic challenge facing the country.
For 2016 overall, productivity actually declined – the first fall in 34 years. Productivity last year had previously been reported as a slight increase of 0.2 percent. However, that gain evaporated as part of the government’s annual benchmark data revisions. It marked the first annual decline in productivity since a 1 percent drop in 1982.
The small improvement in the second quarter reflected the fact that overall economic growth, as measured by the gross domestic product, accelerated to a 2.6 percent rate of increase compared to a 1.2 percent gain in the first quarter.