U.S. worker productivity grew more than
twice as fast in the second quarter as in the previous three
months as the economy accelerated, suggesting a boost to corporate
profits that may lead to more hiring.
Productivity, a measure of how much an employee produces for
every hour of work, rose from April to June at a 5.7 percent
annual rate, the Labor Department said in Washington. In one sign
the job market already may be strengthening, the department also
said initial jobless claims unexpectedly fell 3,000 to 390,000
last week, the lowest since February.
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“We are seeing a strong recovery in profits and
profitability” partly due to increased productivity, said Richard
Berner, chief U.S. economist at Morgan Stanley. “An improvement
in profits is going to be a major factor in making this recovery
sustainable and making companies go out and hire.”
U.S. retailers including Wal-Mart Stores Inc., Target Corp.
and J.C. Penney Co. said July sales rose more than forecast
as shoppers worried less about the economy and bought more
discounted summer merchandise. The four-week moving average of
jobless claims fell below 400,000 for the first time since
February, according to a recent Labor report.
The productivity surged to more than twice the annual average
of 2.8 percent from 1996-2002, as the economy expanded faster than
analysts expected and companies fired 170,000 workers, leading to
a drop in hours worked. Unit labor costs, or the amount paid for
each unit of production, declined for a third straight quarter and
are down 1 percent in the last year.
Bloomberg News
