Get breaking news alerts via email

Click here to manage your alerts
FILE - In this Wednesday, May 8, 2013, file photo, Jeff Caldwell, 29, right, a chassis assembly line supervisor, checks a vehicle on the assembly line at the Chrysler Jefferson North Assembly plant in Detroit. The government reports on worker productivity and labor costs in the April-June quarter on Friday,Aug. 16, 2013. (AP Photo/Paul Sancya, File)
Worker productivity up modestly in April-June
First Published Aug 16 2013 11:23 am • Last Updated Aug 16 2013 11:23 am

WASHINGTON • U.S. worker productivity accelerated to a still-modest 0.9 percent annual pace between April and June after dropping the previous quarter.

The second-quarter gain beat economists’ expectations and reversed a decline in the January-March quarter, when the Labor Department’s revised numbers show productivity shrank at a 1.7 percent annual pace.

Join the Discussion
Post a Comment

Labor costs rose at a 1.4 percent annual pace from April through June, reversing a revised 4.2 percent drop the previous quarter.

Productivity measures output per hour of work. Weak productivity suggests that companies may have to hire because they can’t squeeze more work from their existing employees — that is, if demand for a company’s products is growing.

Productivity growth has been weaker recently, rising 1.5 percent in 2012 and 0.5 percent in 2011.

Annual productivity growth averaged 3.2 percent in 2009 and 3.3 percent in 2010. In records dating back to 1947, it’s been about 2 percent.

The economy so far hasn’t been growing fast enough to fuel a hiring spree. Growth came in at a lackluster 1.1 percent annual rate from January through March and a still-weak 1.7 percent annual rate from April through June. The economy has been pinched by tax increases, federal spending cuts and weakness overseas. Economists expect U.S. growth to pick up in the second half of 2013 as the effects of the tax increases and budget cuts begin to fade.

"Companies will have to start to increase their work force and start hiring more aggressively should the upward trend in the economy continue," Annalisa Piazza, an analyst at Newedge Strategy, wrote in a note to clients.

The economy has added 192,000 jobs a month so far this year, on average, a modest improvement on last year’s average 183,000 new jobs a month.

For now, the modest rise in labor costs means wages aren’t growing fast enough to raise worries about inflation.

story continues below
story continues below

The Federal Reserve monitors productivity and labor costs for any signs that inflation could pick up. Mild inflation has allowed the Fed to keep short-term interest rates at record lows and to buy bonds to try to keep long-term rates down.

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment

About Reader Comments

Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.