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

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