U.S. Productivity Jumps Most Since 2009 as Hours Worked Plunge
(Bloomberg) -- Productivity in the U.S. rose in the second quarter by the most in 11 years as hours worked slumped more than output during the economic shutdown to contain the coronavirus.
Nonfarm business employee output per hour increased at a 7.3% annualized rate from April through June, the biggest gain since the first quarter of 2009, after declining at a revised 0.3% pace in the first quarter, according to Labor Department figures Friday. The second-quarter pace was faster than the 1.5% projection in Bloomberg’s survey of economists. Unit labor costs surged 12.2% following a revised 9.8% increase.
Output slumped at a 38.9% pace, the most in quarterly records back to 1947, while hours worked plummeted at a 43% pace, also the most since then.
Despite the record drop in output in the second quarter as a result of the pandemic, productivity improved as hours worked fell even more. The data on efficiency and cost of labor will probably remain volatile as the economy rebounds from the sharpest downturn since the 1940s and businesses operations pick up.
From a year earlier, productivity rose 2.2%. Unit labor costs increased 5.7% year-over-year. The report also showed inflation-adjusted hourly compensation rose at a 24.8% annual pace during the quarter after an 8.1% increase.
©2020 Bloomberg L.P.