Productivity growth slowed in spring
AP , Washington: Aug 8 2008
Made Popular Aug 8 2008

The efficiency of America’s workers grew at a slightly slower pace in the spring as companies sought to produce more with leaner work forces. Workers’ compensation growth slowed, too.

The Labor Department reported Friday that productivity _ the amount an employee produces for every hour on the job _ grew at an annual rate of 2.2 percent during the April-to-June quarter. That was down from a 2.6 percent growth rate logged in the first three months of this year.

Economists were forecasting productivity to pick up slightly to a 2.7 percent pace.

Meanwhile, growth in compensation _ wages and benefits _ also slowed as companies were less generous amid troubles in the economy and uncertainty about their own prospects.

Unit labor costs slipped to a 1.3 percent pace in the second quarter, from a 2.5 percent growth rate in the first quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. Economists look to this barometer for clues about inflation.

The showing on compensation matched economists’ expectations.

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