Productivity Second Estimate Unrevised at 2.3% Annual Growth

Productivity was unrevised in today's second estimate for the second quarter at a respectable 2.3 percent annual growth, though unit labor costs slightly outstripped productivity growth, at a 2.6 percent growth rate and revised up 2 tenths from the first estimate. The key in this report is hours worked, which fell 0.4 percent in the quarter for only a 0.9 percent year-on-year growth rate. This is the lowest growth rate in nine years and hints, as does moderation underway in job openings as tracked in the JOLTS report, that demand for labor may be peaking. Output rose at a 1.9 percent pace in the second quarter with hourly compensation up 4.9 percent. When adjusted for inflation, real hourly compensation rose at a 1.9 percent pace to match the pace of output.