Rise in Unit-Labor Costs and Fall in Productivity

The Labor Department has released revised data indicating a rise in unit-labor costs and a decline in productivity for the second quarter of this year. This revision follows a decrease in the initial estimate of U.S. GDP growth from 2.4% to 2.1%.

Unit-labor costs, a significant indicator of wage pressure inflation, rose at a revised annual rate of 2.2% in the second quarter. This is an increase from the initial estimate of a 1.6% pace.

On the other hand, productivity growth was revised down to a 3.5% annual rate from the initial estimate of a 3.7% rate for the same period. Over the past 12 months, however, productivity managed to show positive growth, rising at a modest clip of 1.3%. This marks the first positive reading since the fourth quarter of 2021.

The output of goods and services experienced a revised growth rate of 1.9% in the second quarter, which was lower than the previous estimate of 2.4%.

Meanwhile, hours worked fell at a slightly faster rate of 1.5% annually, as per the revised data. The initial estimate had predicted a 1.4% rate of decline.

These revised figures shed light on the state of wage pressure inflation and productivity in the second quarter. It is important to monitor these indicators as they play a crucial role in assessing economic health and planning for the future.