WASHINGTON (AP) – U.S. productivity fell in the April-June quarter by a larger amount than first estimated, while labor costs accelerated sharply.
Productivity declined at an annual rate of 0.6 percent, even worse than the 0.5 percent drop initially reported, the Labor Department reported Thursday. It marked the third straight quarter that productivity has fallen.
Labor costs rose at an annual rate of 4.3 percent, the biggest rise since a 5.7 percent increase in the fourth quarter. Labor costs had fallen at a 0.3 percent rate in the first quarter.
Productivity is the amount of output per hour of work. It is the major factor that supports rising living standards and has been lagging in the current seven-year economic expansion.
The downward revision in productivity for the second quarter matched the 0.6 percent decline in productivity in the first quarter. The latest figure reflected the fact that the government last week revised lower its estimate of overall output, as measured by the gross domestic product. The revision showed GDP grew at an anemic 1.1 percent rate in the second quarter, slightly lower than the 1.2 percent first reported.