By Jeffrey Sparshott

U.S. labor productivity declined for the second consecutive quarter as overall economic output contracted and employers spent more on labor as they added workers.

U.S. nonfarm labor productivity--a measure of goods and services produced in the U.S. per hour worked--fell at a seasonally adjusted annual rate of 4.6% in the second quarter from the prior quarter, the Labor Department said Tuesday. Economists surveyed by The Wall Street Journal had estimated a drop of 5%.

Unit labor costs, a measure of worker compensation and productivity, increased at a 10.8% pace in the second quarter from the prior quarter, Labor said. Economists had expected a 9.5% increase.

Quarterly productivity figures are volatile but the weak second-quarter number follows a 7.4% pullback in the first quarter, the sharpest drop in 74 years. Together with rising labor costs, the report points to the challenges for the Federal Reserve's efforts to tamp down inflation that is running at a four-decade high.

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(END) Dow Jones Newswires

August 09, 2022 09:02 ET (13:02 GMT)

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