U.S. second-quarter productivity revised lower

WASHINGTON (Reuters) – U.S. worker productivity grew a bit more slowly than initially thought in the second quarter, the Labor Department said on Thursday.

FILE PHOTO: An employee of McDonald’s serves a BTS meal, which is inspired and promoted by K-pop boy band BTS, during lunch hour at its restaurant in Seoul, South Korea, May 27, 2021. REUTERS/Kim Hong-Ji//File Photo

Nonfarm productivity, which measures hourly output per worker, increased at a downwardly revised 2.1% annualized rate last quarter. It was previously reported to have advanced at a 2.3% pace. Economists polled by Reuters had expected productivity would be raised to a 2.4% rate.

Productivity grew at a 4.3% rate in the January-March quarter. It surged early in the pandemic before slumping in the final three months of 2020. Economists attributed the jump to the hollowing out of lower-wage industries, like leisure and hospitality, which they said tended to be less productive.

Compared to the second quarter of 2020, productivity increased at a 1.8% rate.

Hours worked increased at a 6.0% rate last quarter, revised up from the 5.5% pace estimated last month.

Unit labor costs – the price of labor per single unit of output – grew at a 1.3% rate. They were previously reported to have climbed at a 1.0% pace in the second quarter. Unit labor costs fell at a 2.8% rate in the first quarter.

They advanced at a 0.2% pace from a year ago, instead of rising at a 0.1% rate as previously reported.

Unit labor costs have also been distorted by the pandemic’s disproportionate impact on lower-wage industries.

Hourly compensation increased at a 3.4% rate last quarter, rather than the previously reported 3.3% pace. That followed a 1.4% growth pace in the first quarter.

Compensation increased at an unrevised 2.0% rate compared to the second quarter of 2020.

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