US worker productivity increased at its fastest pace in 11 years in second quarter as hours plunged amid the Covid-19 pandemic, leading to an acceleration in labor costs.
The Labor Department said on Friday nonfarm productivity, which measures hourly output per worker, increased at a 7.3 percent annualized rate last quarter, its largest rise since the second quarter of 2009. Productivity fell at a 0.3 percent pace in the January-March period. Hours worked tumbled at a 43.0 percent rate in the second quarter, the largest since the series started in the first quarter of 1947.
Economists polled by Reuters had forecast productivity rebounding at a 1.5 percent rate in the second quarter.
Compared to the second quarter of 2019, productivity rose at a 2.2 percent rate. Growth in unit labor costs - the price of labor per single unit of output - jumped at a 12.2 percent rate in the April-June quarter. Unit labor costs increased at a 9.8 percent rate in the first quarter. They rose at a 5.7 percent rate in from a year ago.