Q2 productivity, cost measures rise less than expected

• Q2 Productivity and Costs: +2.3% vs. +3.5% expected, +5.4% prior.
• Y/Y, nonfarm business sector labor productivity increased 1.9%.
• Q2 marks the fourth straight quarter with increases in both output and hours worked after historic declines in both measures in Q2 2020. Over those four quarters, nonfarm business output increased 15.8%, putting the index 1.2% above Q4 2019's level.
• Unit labor costs: +1.0% vs. +1.2% expected and +1.7% prior.
• The costs increase was a combined effect of a 3.3% increase in hourly compensation and a 2.3% rise in productivity.
• Unit labor costs rose 0.1% over the last four quarters as hourly compensation increased 2.0% and productivity rose 1.9%.
• Manufacturing sector labor productivity increased 6.9% in Q2, with output up 3.8% and hours worked down 2.9%. Unit labor costs in the total manufacturing sector fell 1.9% during the quarter, reflecting a 4.9% decline in hourly compensation combined with the 6.9% productivity increase.