11 August 2009, 18:29  US productivity gains

American productivity gains reached their highest level since 2003, according to second quarter productivity and cost data released by the US Department of Labor today. Productivity – measured by the output hours of all workers – reached 6.3% in the business sector and 6.4% in the non-farm sector, compared with growth of just 0.2% and 0.3% in the first quarter of 2009. The gains resulted from the number of hours worked declining faster than output. In the business sector, output fell by 1.8%, while the number of hours worked fell by 7.5%. Hourly compensation increased by 0.1%. However, real hourly compensation, which takes into account changes in consumer prices, saw a 1.2% decline over the quarter. Unit labour costs fell by 5.8%, the biggest fall in eight years. In the non-farm sector, the 6.4% productivity gain resulted from a 1.7% decline in output and a 7.6% fall in hours. Hourly compensation increased by 0.2%, but fell by 1.1% in real terms, and unit labour costs also fell by 5.8%. In manufacturing, productivity increased by 5.3%, including an rise of 3.9% in durable goods manufacturing, and 2.0% in non-durable goods manufacturing. Output fell by 9.9% and there was a 14.4% decrease in the number of hours worked. Hourly compensation in the manufacturing sector rose by 4.4% on a real basis – a slight decline from the 4.6% increase in the first quarter of 2009.

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