WASHINGTON, Aug. 9 (UPI) -- U.S. non-farm business productivity grew a slowed pace of 1.1 percent for the second economic quarter of the year, according to the Labor Department on Friday.
The report from the Bureau of Labor Statistics showed second quarter productivity had the lowest increase in a year, though 2Q results did beat Wall Street expectation, with a consensus of economists forecasting that on average productivity would increase 0.5 percent.
The 1.1 percent non-farm productivity rate for the second quarter was markedly down from the 8.6 percent productivity growth rate for the first quarter of the year, from January to March 31.
The BLS reported less hours worked, with work hours down 0.7 percent in the second quarter, and output increased 0.5 percent.
Noting the slow rate of productivity growth, the Manufacturers Alliance, an industry and business group, called for further cuts in the key U.S lending rate by the Federal Reserve in order to further stimulate the economy.
"The slowdown in productivity growth is no surprise, and confirms other indicators of a reduced rate of growth in the second quarter," said Thomas J. Duesterberg, president and chief executive officer of the Manufacturers Alliance/MAPI, in Arlington, Va. "This slow, jobless, inflation free recovery needs a boost from lower interest rates at the Fed meeting next week."
Also, according to the productivity report, hourly compensation in the nonfarm business sector increased 3.6 percent in both the first and second quarters of 2002. When the rise in consumer prices is taken into account, real hourly compensation for the second quarter of 2002 rose 0.2 percent.
Unit labor costs increased 2.4 percent in the second quarter of 2002, after falling 4.6 percent during the first quarter. The implicit price deflator for nonfarm business output grew 1.4 percent in the second quarter and declined 0.2 percent in the first quarter of 2002.
Productivity increased 4.9 percent in manufacturing, as output grew 4.1 percent and hours of all persons declined 0.8 percent (seasonally adjusted annual rates). In the previous quarter, productivity rose 9.7 percent, reflecting an increase of 3.0 percent in output and a drop of 6.1 percent in hours.
