Courtesy of Mish.
Economists expected bounce in productivity, and got one, but it was a bit weaker than than the Bloomberg Consensus Estimate of 1.6%.
A bounce back for output gave first-quarter productivity a lift, up a quarter-to-quarter 1.3 percent vs a revised decline of 1.1 percent in the first quarter. The bounce in output also held down unit labor costs which rose 0.5 percent vs 2.3 percent in the first quarter.
Output in the second quarter rose 2.8 percent vs a depressed 0.5 percent in the first quarter. Compensation rose 1.8 percent, up from 1.1 percent in the first quarter, while hours worked were little changed, up 1.5 percent vs 1.6 in the first quarter.
Looking at year-on-year rates, growth in productivity is very slight at only plus 0.3 percent while costs do show some pressure, up 2.1 percent in a reading, along with the rise in compensation, that will be welcome by Federal Reserve officials who are hoping that gains in wages will help offset weakness in commodity costs and help give inflation a needed boost.
Productivity vs. Unit Labor Costs
Productivity Dry Spell
MarketWatch reports Productivity Dry Spell Looks Worse in Latest Report
The dry spell of productivity in this economic expansion is even worse than previously thought, according to new data released Tuesday.
The average annual rate of productivity growth from 2007 to 2014 was revised down to 1.3% per year from the prior estimate of 1.4%, the Labor Department said Tuesday.
This is well below the long-term rate of 2.2% per year from 1947 to 2014.
Productivity in 2013 was especially weak, revised down to unchanged from the prior estimate of a 0.9% gain. Productivity even dipped below zero for three quarters in 2013. That hadn’t been seen since 1982.
Former Fed chairman Alan Greenspan said Monday that weak productivity is the most serious problem that confronts the U.S.
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