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Productivity Rate Soars in Second Quarter
Thu August 7, 2003 08:33 AM ET
WASHINGTON (Reuters) - U.S. businesses boosted their productivity sharply during the second quarter, squeezing out more output while ratcheting down labor costs, a Labor Department report showed on Thursday.
U.S. non-farm productivity climbed at a robust 5.7 percent rate, more than twice the revised 2.1 percent pace posted during the first three months of the year. That handily exceeded Wall Street economists' forecasts for a 4.1 percent increase in second-quarter productivity and implied companies were becoming leaner and more efficient at boosting their output while keeping costs under control.

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

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