U.S. worker productivity increased at its fastest pace in more than three years in the second quarter, depressing labor costs, but the trend in productivity growth remained moderate.
The Labor Department said on Wednesday nonfarm productivity, which measures hourly output per worker, rose at a 2.9 percent annualized rate in the April-June quarter. That was the strongest rate since the first quarter of 2015.
Data for the first quarter was revised lower to show productivity increasing at a 0.3 percent pace instead of the previously reported 0.4 percent rate. Economists polled by Reuters had forecast productivity growing at a 2.3 percent rate in the second quarter. Compared to the second quarter of 2017, productivity increased at a rate of 1.3 percent.
The government also revised data going back to 1947, which did not materially change the picture of lackluster productivity growth, though unit labor costs were stronger than previously estimated in 2017 because of upward revisions to hourly compensation.