WASHINGTON – Second quarter nonfarm productivity rose 0.9% above the 0.8% gain expected, while unit labor costs were up only 0.6% rather than the 1.1% rise expected, data released by the Bureau of Labor Statistics Wednesday showed.
In addition, first quarter productivity was revised up to a 0.1% rate of growth from the flat reading previously reported. More importantly, unit labor costs are now reported up 5.4% in the first quarter, compared with a 2.2% rise in the previous estimate.
The annual revisions to the GDP data are included in the report.
Second quarter output rose at a 3.4% rate, compared with the 1.8% rate now reported for the previous quarter. Hours worked rose 2.5% in the second quarter after 1.6% in the first quarter.
Compensation rose 1.6% in the second quarter after a sharply upward revised 5.5% jump in the first quarter, but rose 1.9% after inflation adjustment. Real compensation rose 2.3% in the first quarter, compared with 0.9% decline previously reported for that quarter.
The year/year pace of productivity growth held steady at 1.2% in the second quarter, both improvements from the string of declines reported earlier in 2016.
Unit labor costs now stand 0.2% lower than they were a year ago, a deterioration from the revised 0.7% year/year rate in the first quarter. The year/year rate for unit labor costs is likely to rebound later in the year, as unit labor costs fell in the third and fourth quarters of 2016
