The productivity of US workers unexpectedly declined for third consecutive quarter, which exacerbated concerns about the efficiency, which characterizes the economic expansion. The measure of productivity per worker per hour dropped by 0.5% yoy in the period from April to June, after falling by 0.6% yoy in the previous quarter. Meanwhile, the costs per employee were growing by 2%, after been revised to a decline in the previous quarter.
The productivity declined on an annual basis for the first time since 2013 after despondent global markets forced the company to withdraw its plans for capital investment. Amid the worsening corporate earnings and the lack of faster economic growth, the enterprises begin to reverse their plans for hiring employees.
The unit labor costs are expected to rise by 1.8% in the second quarter, as in the previous one were revised to a decline of 0.2%. The hourly pay declined by 1.5% in the second quarter.
The efficiency of workers decreased by 0.4% yoy, while labor costs are up by 2.1% over the same period. In the second quarter of 2016 productivity among industrial enterprises was down 0.2%, following a rise of 1.5% in the previous.
On such background, economic growth continues to be disappointing. In the period, from April to June, the economy expanded by 1.2% yoy, while in 2016 the gross domestic product of the United States will likely rise by 2%. Some economists believe that government data on labor productivity are outdated and inadequate to capture the changes in technology that have allowed more progress. While the data show that the growth potential of the economy without stoking inflation might be limited.
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