Key facts
- U.S. nonfarm productivity growth was unrevised at 1.4% in the second quarter.
- Unit labor costs increased 1.2% in the second quarter, a downward revision.
- Productivity grew 2.2% from a year ago.
- Manufacturing productivity was revised up to 2.4% for the quarter.
- Real hourly compensation decreased 3.1% in the second quarter.
U.S. worker productivity growth in the second quarter was confirmed at a 1.4% annualized rate, unchanged from the preliminary estimate, according to the Labor Department's Bureau of Labor Statistics. This steady growth in hourly output per worker is expected to help keep labor costs in check.
Unit labor costs, which represent the price of labor per single unit of output, increased at a downwardly revised 1.2% rate in the second quarter, compared to a previous estimate of 1.3%. Labor costs grew at a 1.4% rate from a year ago.
Economists and policymakers anticipate that the increasing adoption of artificial intelligence by businesses will further boost productivity and potentially restrain inflation by reducing labor costs.
Manufacturing productivity saw an upward revision, increasing to 2.4% from a preliminary 1.9%, marking its strongest reading since the second quarter of 2021. Output in manufacturing increased 1.7% and hours worked rose 0.3% in the second quarter.
Real hourly compensation, which accounts for consumer prices, decreased by 3.1% in the second quarter and by 0.1% over the last four quarters. The labor share of output, representing the percentage of output accruing to workers, fell to 52.9% in the second quarter, the lowest level recorded since the series began in the first quarter of 1947.