U.S. labor productivity rise more than expected in the second quarter

The preliminary data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States increased 2.3 percent q-o-q in the second quarter of 2019, as output advanced 1.9 percent q-o-q and hours worked fell 0.4 percent q-o-q (seasonally adjusted).

That was above economists’ forecast for a 1.5 percent q-o-q gain after a revised 3.5 percent q-o-q increase in the first quarter (originally a 3.4 percent q-o-q surge).

In y-o-y terms, the labor productivity rose 1.8 percent in the second quarter, reflecting a 2.6-percent jump in output and a 0.8-percent advance in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the second quarter rose 2.4 percent q-o-q compared to a revised 5.5 percent q-o-q surge in the prior quarter (originally a 1.6 percent q-o-q drop).

Economists had forecast a 1.7 percent gain in second-quarter unit labor costs.

Unit labor costs quarterly increase reflected primarily a 4.8-percent climb in hourly compensation and a 2.3-percent advance in labor productivity.

Compared to the corresponding period of 2018, unit labor costs rose 2.5 percent.