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Productivity in U.S. Rebounds as Employers Try to Curb Costs

Bloomberg (08/08/12) Alex Kowalski

U.S. productivity rose at a 1.6% annual rate in the second quarter, the U.S. Department of Labor reported today, as output of goods and services rose much faster than the amount of time employees worked. Second-quarter productivity was projected to rise 1.4%, according to the median forecast of 59 economists surveyed by Bloomberg News. DOL said output rose 2.0% in the April-to-June period, while hours worked increased at a slower 0.4% rate. That was down sharply from a 3.2% gain in hours worked during the first quarter. Unit-labor costs, meanwhile, slowed to a 1.7% increase from 5.6% in the first quarter. Hourly wages, after factoring out inflation, rose 2.6% to match the first-quarter gain. The drop in productivity at the start of 2012, pared with a slowdown in profits, may be prompting companies to focus on enhancing efficiency to curb costs, making a pickup in employment more difficult to spur.