US worker productivity falls in Q2 , causing annual decline

The productivity of American workers dropped in the April-June quarter, feeding into a 12 month decline in the economic output people are generating for each hour worked.

The Labor Department says productivity fell at an annual rate of 0.5 percent in the second quarter after a 0.6 percent drop during the first three months of the year.

Productivity has dropped 0.4 percent from a year ago, as labor costs and the hours worked are rising faster than the output of workers’ goods and services. Unit labor costs rose 2 percent in the second quarter, after decreasing 0.2 percent in the first quarter.

Productivity has been weak for the past five years, a thorny problem since productivity growth is the key factor supporting rising living standards and higher incomes.