WASHINGTON, Aug. 7 (UPI) -- Second-quarter non-farm business productivity rose at a 1.8 percent annualized rate, the U.S. Labor Department reported Tuesday.
Unit labor costs, reflecting changes in hourly pay and productivity, increased 2.6 percent during the second quarter of 2007 after rising 3.1 percent in the previous quarter, the department's Bureau of Labor Statistics said in a news release.
Labor costs, viewed as a gauge of inflationary pressures, had been expected to rise about 1.6 percent, Marketwatch reported.
Non-farm productivity was lower than anticipated, as Wall Street analysts predicted a 2 percent increase.
Action Economics said the combination of lower growth and higher upward wage-cost pressure is "unambiguously bad news for the Fed," Marketwatch reported.
The BLS reported a 2.6 percent increase in productivity in the business sector.
"These rates of growth are higher than those for the first quarter of 2007, when productivity increased 0.2 percent in the business sector and 0.7 percent in the non-farm business sector," the BLS said.
Productivity in the total manufacturing sector grew 1.6 percent in the second quarter.
