US productivity soars in second quarter

 

US businesses boosted their productivity sharply during the second quarter while keeping down labour costs, a report showed today.

US non-farm productivity climbed at a robust 5.7 per cent rate, more than twice the revised 2.1 per cent pace posted during the first three months of the year, according to the Labor Department report.

That easily exceeded Wall Street economists' forecasts for a 4.1 per cent increase in second-quarter productivity and implied companies were becoming leaner and more efficient at boosting their output while keeping costs under control.

Unit labour costs, which economists monitor as a sign of potential wage pressure, declined 2.1 per cent during the second quarter after rising 2 per cent in the first quarter this year.

The report reflected an annual benchmark revision of data that showed national productivity, or output per hour of all workers, grew last year at the most vigorous rate in more than half a century.

The revised 5.4 per cent increase in productivity during 2002 - up from a previously reported 4.8 per cent rise - was the strongest for any year since a 6.7 per cent jump in 1950 during the Korean War era.