U.S. Worker Productivity Growth Slows Second Quarter

The productivity of U.S. workers grew in the second quarter, but at a sharply slower pace than at the beginning of the year, the Labor Department reported on Friday, reflecting the sluggish nature of the economic recovery.

The Labor Department said worker output per hour in nonfarm businesses advanced by 1.1 percent in the second quarter, down from the upwardly revised 8.6 percent gain in the previous quarter and the weakest showing since the second quarter of 2001.

The fall in productivity reflected a much slower pace of economic output, as the amount of worker hours fell for a fifth straight quarter. Output rose 0.5 percent in the quarter, down from a 6.2 percent increase in the first quarter, while hours worked fell 0.7 percent.

Unit labor costs, a closely watched gauge of wage pressures, rose 2.4 percent, the first increase since the second quarter of 2001. But compared with year-ago levels, unit labor costs were still down 2.2 percent, Labor said.

Analysts polled by Reuters had expected productivity to post a smaller gain of 0.8 percent. Friday's report reflects recently released revisions to estimates of economic growth as well as employment and hours data.