Higher Productivity, Lower Wages Reported in Q2

Washington, DC, Sept. 4, 2008--Productivity climbed in the spring while labor costs declined, the Commerce Department said. That could indicate that inflation is moderating.

The government reported Thursday that productivity jumped 4.3 percent at an annual rate in the April-June quarter, a full percentage point higher than economists expected.

At the same time, labor costs fell at an annual rate of 0.5 percent, slightly better than expected.

The 4.3 percent rise in productivity in the second quarter was nearly double the initial estimate released a month ago. The higher figure reflected the big upward revision the government made last week to overall growth for the second quarter, pushing the gross domestic product to a rate of 3.3 percent, revised from an initial figure of 1.9 percent.

The 4.3 percent rate of increase for productvity followed a more moderate 2.6 percent rise in the first quarter.

The 0.5 percent drop in unit labor costs followed a 1.2 percent rise in the first quarter and was the first decline since a 2.4 percent drop in the July-September quarter of last year.