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Worker Maria Robles sews clothes at the Karen Kane clothing company in Los Angeles, California June 30, 2011. (LUCY NICHOLSON/REUTERS)
Worker Maria Robles sews clothes at the Karen Kane clothing company in Los Angeles, California June 30, 2011. (LUCY NICHOLSON/REUTERS)

U.S. productivity rises in second quarter Add to ...

U.S. nonfarm productivity rose more than expected in the second quarter as companies expanded output but only modestly increased the hours worked by their employees, data from the Labor Department showed on Wednesday.

Productivity climbed at a faster-than-expected 1.6 per cent annual rate between April and June.

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In the same report, the government also said productivity rose 0.7 per cent last year, more than the initially estimated advance of 0.4 per cent. In another revision, productivity declined less than initially thought in the first quarter of 2012, the Labor Department said.

The upwardly revised trend in recent productivity growth is heartening for the economy because in the long run living standards improve when workers are more productive.

Analysts polled by Reuters had expected productivity to increase at a 1.3 per cent annual rate during the period.

Output increased at a 2.0 per cent rate during the period, but hours worked only rose at a 0.4 per cent rate, the department said.

The report also showed unit labour costs climbing 1.7 per cent during the period, a faster pace than the 0.6 per cent gain expected by economists polled by Reuters.

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