U.S. Worker Productivity Up To 4.3%, Labor Costs Drop 0.5% In 2Q

September 4, 2008 12:42 p.m. EST

Washington, D.C. (AHN) - The worker productivity of U.S. private businesses soared during the second quarter more than projected by the market analysts and labor costs declined, a government report said on Thursday.

U.S. worker productivity, which is defined as output per hour worked, increased at an annual rate of 4.3 percent in the second quarter, according to the data released from the Labor Department in Washington.

The latest percentage is more than the government's earlier estimation of 2.2 percent rise in the productivity, after it increased by 2.6 percent at annual rate in the first quarter.

When the U.S. productivity is compared to the percentage rise from last year, it gained by 3.4 percent, a rise at a faster pace compared to the growth rate of 2.5 percent between 2000 and 2007.

However, labor costs unexpectedly declined by 0.5 percent in the second quarter, compared to government's earlier projection of a 1.3 percent rise after advancing by 1.2 percent in the first quarter.

The market analysts had expected the labor costs, which is a key measure of inflationary pressures, to drop by 0.3 percent. The costs were 0.6 percent higher a year earlier.

On Friday, the U.S. Labor Department will release report on non-farm payrolls for the month of August, which the market analysts are projecting to decline for the eight consecutive month as weekly claims have consistently increased last month.