WASHINGTON - U.S. non-farm productivity rose at a revised 2.2% rate in the second quarter of 2012 from the initial estimate of a 1.6% increase, as output growth was revised higher and hours worked growth was revised lower in the quarter, data released by the Bureau of Labor Statistics Wednesday showed.

As a result of the acceleration in productivity growth, unit labor costs were revised down to a 1.5% growth rate in the second quarter from
the preliminary estimate of a 1.7% increase. However, unit labor costs were revised up to a 6.4% increase in the first quarter from the 5.6% jump previously reported. The index levels in both quarters were revised higher.

Productivity fell at an unrevised 0.5% pace in the first quarter.

Both productivity and unit labor costs posted faster increases than expected in an MNI survey of economists, which had centered on a 1.9% rise for productivity and a 1.4% increase for unit labor costs.

Output rose 2.4% in the second quarter, an upward revision from the 2.0% preliminary projection, but still below the unrevised 2.7% rise in the first quarter. At the same, the growth in hours worked was revised down to 0.1% rise from the preliminary estimate of a 0.4% increase, a sharp deceleration from the unrevised 3.2% pace in the first quarter.

Hourly compensation is now reported up 3.7% in the second quarter, an upward revision from the initial estimate of 3.3%. The first quarter also saw a sharp upward revision to the compensation growth rate to a 5.8% increase from the preliminary estimate of a 5.1% gain.

As a result of the upward revision in compensation growth and a smaller upward adjustment to price inflation, real compensation was revised up to a 2.9% rise from a 2.6% increase in the preliminary second quarter. The first quarter was revised up to a 3.3% gain from the previous estimate of a 2.6% climb. The implicit price deflator posted a 1.7% rise in the revised second quarter estimate, up from the 1.6% preliminary estimated and after a 1.9% rise in the first quarter.

On a year-over-year basis, productivity growth was revised up to a 1.2% hike in the second quarter from the 1.1% rise preliminary estimate. The year/year rate for first quarter productivity was unrevised at a 1.0% increase.

Unit labor costs now stand 0.9% above their year ago level in the second quarter, compared with the initial estimate of 0.8% and the revised 0.2% rise in the year/year reading in the first quarter. Previously, the year/year rate for the first quarter was flat.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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