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US sees strong productivity rise US sees strong productivity rise
(about 1 hour later)
US productivity rose at its fastest annual pace for nearly six years in the second quarter of 2009, figures show. US productivity rose at its fastest annual pace for nearly six years in the second quarter of 2009, figures from the Department of Labor show.
Productivity, measuring workers' hourly output, rose at an annual rate of 6.4% in the second quarter.Productivity, measuring workers' hourly output, rose at an annual rate of 6.4% in the second quarter.
However, the figure for the first quarter of 2009 was revised downwards, to an increase of 0.3% from an initial estimate of 1.6% growth.However, the figure for the first quarter of 2009 was revised downwards, to an increase of 0.3% from an initial estimate of 1.6% growth.
Labour costs fell 5.8% on an annual basis during the same period. Both sets of data were more than forecast. Labour costs fell 5.8% on an annual basis during the same period.
The annual pace of productivity gains in the second quarter of this year was the highest since the third quarter of 2003.The annual pace of productivity gains in the second quarter of this year was the highest since the third quarter of 2003.
The fall in labour costs was the most since 2000. It came after the previous quarter's labour costs fell 2.7%.The fall in labour costs was the most since 2000. It came after the previous quarter's labour costs fell 2.7%.
Firms have been reducing jobs and hours to save costs as demand for their goods has slowed.Firms have been reducing jobs and hours to save costs as demand for their goods has slowed.
While many analysts believe the recession is not over, they also argue that the economy is through the worst. The number of hours worked declined at an annual rate of 7.6% in the second quarter, reflecting the rise in unemployment.
While many analysts believe the recession is not yet over, they also argue that the economy is through the worst.
"It's good because it helps keep inflation low; labour costs are pretty benign," said Scott Brown, chief economist at Raymond James & Associates.
"On the other hand it means you can do more with fewer people," he added.