U.S. worker productivity growth slowed in the second quarter, and labor costs were weaker than initially estimated in Q1.
Source: U.S. Bureau of Labor Statistics
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Nonfarm productivity, which measures hourly output per worker, improved at a 2.3% annualized rate last quarter. Figures for Q1 were revised lower to show productivity rising at a 4.3% rate rather than the previously reported 5.4% rate.
Productivity rose earlier in the Pandemic before declining in the last three months of 2020 and has since rebounded. The mixed results were partly attributable to the decline in low-wage industries, reopening over the previous months at an improved speed.
US productivity rose at a 1.9% pace compared to Q2 of 2020. Hours worked rose at a 5.5% rate last quarter, increasing from a revised 4.0% growth pace in the Q1 period.
The overall economic output is now 1.2% above the pre-pandemic levels, but hours worked remained 2.8% below it. The resurgence in economic activity has not been aligned by people flooding back into the workforce.