U.S. Department of Labor Report Shows Increase in Productivity and Output, But Rise in Labor Costs Raises Concerns,

Published / Modified Aug 01 2024
Source: U.S. Department of Labor, CSIMarket Team / CSIMarket.com

The U.S. Department of Labor recently released its report on Productivity and Costs for the second quarter of 2024, revealing some interesting trends in the economy.
The report showed that productivity increased at a faster pace, primarily due to a decrease in labor costs.

According to the report, U.S. productivity climbed by 2.1% on a seasonally adjusted basis in the second quarter.
This increase in productivity helped to offset compensation increases and resulted in lower unit labor costs.
Real hourly compensation also saw a slight increase, growing by 0.3% on a seasonally adjusted basis.
This growth was driven by increases in nonfarm business, durable goods manufacturing, and total manufacturing.

While productivity growth in the first quarter was revised to 0.3%, output continued to grow at a higher rate in the second quarter.
Production jumped by 3.2% on a seasonally adjusted basis, with increases in durable goods manufacturing and nonfarm business leading the way.
Over the past 12 months, U.S. productivity has risen by 2.6%, driven by the increase in output.
Business production has grown by 3.4% over the same period.

Despite the increase in productivity, labor costs also rose, albeit at a slower rate than in the previous quarter.
Business labor costs increased by 1.1% on a seasonally adjusted basis, with nonfarm business, durable goods manufacturing, and total manufacturing leading the way.
Unit labor costs, which describe the relationship between compensation per hour and productivity, rose by 0.5% over the past 12 months.

Overall, the report paints a picture of a growing economy with increasing productivity and output.
However, the rise in labor costs highlights the challenges that businesses may face in managing their expenses.
As the economy continues to evolve, it will be important for policymakers and businesses to monitor these trends and adjust their strategies accordingly.