Second-Quarter U.S. Manufacturing Productivity Lowered

After a second look at the data, the U.S. Labor Department on September 7 revised downward productivity growth in U.S. manufacturing during the second calendar quarter of this year.

The department now says manufacturing productivity grew at a seasonally adjusted annual rate of 3.6% from April through June, down from its initial figure of 4.1%. Growth in the output of the factory sector during the second quarter was less than first figured and the decrease of hours worked was not as large as originally estimated.

However, even at its revised rate, productivity in manufacturing grew at twice the 1.8% revised rate for the larger non-farm business sector of the U.S. economy during the second quarter. Productivity growth for non-farm businesses was originally thought to be 2.2%.

The Labor Department defines productivity as output per working hour.

With hourly compensation higher than first thought, unit labor costs in manufacturing during the second quarter increased 4.7%, up from both the 2.3% initial estimate for the quarter and a 2.8% increase in the first quarter of 2005.

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