RTTNews - Wednesday morning, the Labor Department released its revised report on labor productivity in the second quarter, showing that productivity increased by more than previously estimated, rising at its fastest pace in nearly six years.
The report showed that productivity increased by 6.6 percent in the second quarter compared to the 6.4 percent increase that was reported last month. Productivity increased at the fastest pace since a 9.7 percent increase in the third quarter of 2003.
The upward revision came as surprise to economists, who had been expecting productivity growth to be unchanged at 6.4 percent.
While the revised productivity growth in the second quarter reflects a substantial acceleration from the 0.3 percent growth seen in the first quarter, the growth in the second quarter still came as hours worked fell at a faster pace than output.
Hours worked fell by 7.6 percent in the second quarter, unrevised from the previous report, marking a modest slowdown from the 9.0 percent drop in hours in the first quarter.
At the same time, the report showed that output fell by 1.5 percent in the second quarter, slightly slower than the previously reported 1.7 percent drop. The drop in output in the second quarter marks a considerable slowdown from the 8.8 percent decline seen in the first quarter.
Additionally, the Labor Department said that unit labor costs decreased by a revised 5.9 percent in the second quarter compared to the previously reported 5.8 percent drop.
The drop in unit labor costs in the first quarter was revised to show a more substantial 5.0 percent decrease compared to the 2.7 percent decline that was reported previously.
The report also showed that hourly compensation edged up by a revised 0.3 percent in the second quarter compared the previously reported 0.2 percent increase. Hourly compensation in the first quarter was revised to show a 4.7 percent decrease
Real hourly compensation, which takes into account changes in consumer prices, fell by a revised 1.0 percent in the second quarter compared to the 1.1 percent drop reported last month. Real hourly compensation in the first quarter fell by a revised 2.4 percent.
In other economic news, Automatic Data Processing, Inc. (ADP) released a report showing a bigger than expected drop in private sector jobs in August, although the report still showed a slowdown in the pace of job losses.
ADP said that non-farm private employment fell by 298,000 jobs in August following a revised decrease of 360,000 jobs in July. Economists had expected a decrease of about 246,000 jobs compared to the loss of 371,000 jobs originally reported for the previous month.
While employment fell by more than economists had been anticipating, the loss of jobs in August still marked the smallest drop in employment since September of 2008.
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