U.S. productivity rose at a 7.3 percent rate in the second quarter as the number of hours worked fell by nearly half, the biggest drop-off since the government started tracking the data more than 70 years ago— that’s the finding in a recent Associated Press update from the Labor Department.
On Friday, the department stated that output decreased 38.9 percent, the biggest decline ever recorded, as hours worked fell 43 percent. The department noted the “coronavirus pandemic sowing economic damage throughout the U.S.”
For productivity, the Labor Department said the increase was the largest since 2009. Labor costs also jumped, rising 12.2 percent.
Friday’s report is the first second-quarter productivity estimate and followed the first quarter’s 0.3 percent decline. A rise in labor costs, the largest since 2014, follows a 9.8 percent increase in the January-March quarter.
Defined as the amount of output per hour of work, productivity is the key to rising living standards, and the slow pace of growth in recent years has been a major reason that wage gains have stalled. Productivity mostly lagged during the record-long 11-year expansion that followed the Great Recession, confounding economists.
The government is expected to release a second productivity estimate next month.
Read the full report here.