Financial News: U.S. Labor Productivity Rebounds Roughly In Line With

U.S. Labor Productivity Rebounds Roughly In Line With Estimates In Q2

08/07/2025 - 10:37:00 (RTTNews)

(RTTNews) - Labor productivity in the U.S. saw a significant rebound in the second quarter of 2025, according to preliminary data released by the Labor Department on Thursday.

The report said labor productivity shot up by 2.4 percent in the second quarter after tumbling by a downwardly revised 1.8 percent in the first quarter.

Economists had expected labor productivity to surge by 2.5 percent compared to the 1.5 percent slump that had been reported for the previous quarter.

The rebound by labor productivity, a measure of output per hour, came as output spiked by 3.7 percent compared to a 1.3 percent increase by hours worked.

"The productivity outlook is crucial for inflation," said Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics. "If productivity growth re-accelerates due to tax cuts, deregulation, and technological advancements, including AI, the economy would accelerate without causing inflation to rise."

He added, "By contrast, increased uncertainty, the deadweight loss from tariffs, and a cyclical slowdown in the economy could see productivity growth remain in the slow lane and would imply upside risk to inflation."

The Labor Department also said unit labor costs jumped by 1.6 percent in the second quarter after soaring by an upwardly revised 6.9 percent in the first quarter.

Unit labor costs were expected to increase by 1.5 percent compared to the 6.6 percent spike that had been reported for the previous quarter.

The sharp increase by labor productivity helped offset a continued surge by hourly compensation, which shot up by 4.0 percent in the second quarter after jumping by 5.0 percent in the first quarter.

Real hourly compensation, which takes changes in consumer prices into account, surged by 2.3 percent in the second quarter after climbing by 1.2 percent in the first quarter.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

Thirty-Year Bond Auction Attracts Below Average Demand (19 min(s), 02 sec(s) ago)
(RTTNews) - Finishing off this week's series of announcements of the results of its long-term ...Full Story»

U.S. Wholesale Inventories Inch Up Less Than Expected In June (02 hr(s), 29 min(s), 02 sec(s) ago)
(RTTNews) - Wholesale inventories in the U.S. crept up by less than expected in the month of June, ...Full Story»

U.S. Labor Productivity Rebounds Roughly In Line With Estimates In Q2 (03 hr(s), 0 min(s),02 sec(s) ago)
(RTTNews) - Labor productivity in the U.S. saw a significant rebound in the second quarter of 2025 ...Full Story»

U.S. Jobless Claims Rise More Than Expected To 226,000 (03 hr(s), 10 min(s), 02 sec(s) ago)
(RTTNews) - A report released by the Labor Department on Thursday showed first-time claims for U.S ...Full Story»

Croatia Producer Price Inflation Eases To 0.7% (03 hr(s), 14 min(s), 02 sec(s) ago)
(RTTNews) - Croatia's producer prices increased at a slower pace in July, figures from the Cro ...Full Story»

Iceland Jobless Rate Falls To 2.8% (03 hr(s), 51 min(s), 02 sec(s) ago)
(RTTNews) - Iceland's unemployment rate decreased further in June to the lowest level in ten m ...Full Story»

Bank Of England Cuts Rate In Tight Vote (04 hr(s), 07 min(s), 02 sec(s) ago)
(RTTNews) - The Bank of England reduced its benchmark interest rate in a close call on Thursday su ...Full Story»

Mexico Inflation Eases To 3.51% (04 hr(s), 26 min(s), 02 sec(s) ago)
(RTTNews) - Mexico's consumer price inflation moderated for the second straight month in July, ...Full Story»