U.S. non-farm productivity fell 0.3% on an annualized basis in the second quarter, after a revised 0.6% decline in the first, the Labor Department reported Tuesday.

Unit labor costs, a ratio of hourly compensation to labor productivity, rose 2.2% in the second quarter, down from the revised 4.8% growth in the first.

Workers’ output was up 1.8%, compared to a 0.9% gain in the first quarter.  Hours worked were up 2.0%, after a revised 1.5% rise the previous quarter.

Hourly compensation rose 1.9% after a revised 4.2% increase.

Economists expected productivity to fall 0.8% and unit labor costs to increase 2.3%, according to the median estimate from Thomson Reuters.

Unit labor costs rose 4.4% in the second quarter compared to a 1.1% drop in the first.

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