ANALYSIS:US 2Q Productivity Up 0.9%, Unit Labor Costs Up 0.6%>

By Kevin Kastner, Holly Stokes, and Sara Haire

     WASHINGTON (MNI) - Second quarter nonfarm productivity rose 0.9% 

above the 0.8% gain expected, while unit labor costs were up only 0.6% 

rather than the 1.1% rise expected, data released by the Bureau of Labor 

Statistics Wednesday showed. 

     In addition, first quarter productivity was revised up to a 0.1% 

rate of growth from the flat reading previously reported. More 

importantly, unit labor costs are now reported up 5.4% in the first 

quarter, compared with a 2.2% rise in the previous estimate. 

     The annual revisions to the GDP data are included in the report. 

     Second quarter output rose at a 3.4% rate, compared with the 1.8% 

rate now reported for the previous quarter. Hours worked rose 2.5% in 

the second quarter after 1.6% in the first quarter. 

     Compensation rose 1.6% in the second quarter after a sharply upward 

revised 5.5% jump in the first quarter, but rose 1.9% after inflation 

adjustment. Real compensation rose 2.3% in the first quarter, compared 

with 0.9% decline previously reported for that quarter. 

     The year/year pace of productivity growth held steady at 1.2% in 

the second quarter, both improvements from the string of declines 

reported earlier in 2016. 

     Unit labor costs now stand 0.2% lower than they were a year ago, a 

deterioration from the revised 0.7% year/year rate in the first quarter. 

The year/year rate for unit labor costs is likely to rebound later in 

the year, as unit labor costs fell in the third and fourth quarters of 

2016. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$]