U.S. non-farm productivity in the second quarter rose at its fastest pace in six years as hours worked fell much steeper than output, while the cost of labor fell at the quickest rate in nine years, data showed on Tuesday.
The Labor Department said non-farm productivity rose at a 6.4 percent annual rate, the biggest gain since the third quarter of 2003, from a revised 0.3 percent gain in the first quarter. Productivity for the January-March quarter was previously reported as a 1.6 percent gain.
Analysts polled by Reuters had forecast productivity, which measures the hourly output per worker, rising at a 5.3 percent rate in the second quarter.
Hours worked plunged at a 7.6 percent rate in the second quarter.
Unit labor costs, a gauge of inflation and profit pressures closely watched by the Federal Reserve, fell 5.8 percent, the biggest decline since the second quarter of 2000. Analysts had expected unit labor costs to fall 2.4 percent in the second quarter. Unit labor costs dropped by a revised 2.7 percent in the January-March quarter.
The government also published revisions to productivity for 2006 through 2008 following adjustments to gross domestic product estimates.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)