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

German Inflation Accelerates To 2.2% In August (03 hr(s), 10 min(s), 18 sec(s) ago)
(RTTNews) - Consumer price inflation in Germany climbed in August to its highest level in five mon ...Full Story»

Poland Inflation Eases To 14-month Low (09 hr(s), 08 min(s), 18 sec(s) ago)
(RTTNews) - Poland's consumer price inflation slowed further in August to the lowest level in ...Full Story»

U.S. Consumer Sentiment Deteriorates Slightly More Than Initially Estimated In August (09 hr(s), 13 min(s), 18 sec(s) ago)
(RTTNews) - The University of Michigan released a report on Friday showing consumer sentiment in t ...Full Story»

Portugal GDP Growth Improves As Estimated, Inflation Rises (09 hr(s), 22 min(s), 18 sec(s) ago)
(RTTNews) - Portugal's economic growth accelerated as initially estimated in the second quart ...Full Story»

Chicago Business Barometer Slumps Much More Than Expected In August (09 hr(s), 31 min(s), 18 sec(s) ago)
(RTTNews) - MNI Indicators released a report on Friday showing a sharp pullback by its reading on ...Full Story»

Spain Inflation Steady At 2.7%; Retail Sales Growth Eases (10 hr(s), 13 min(s), 18 sec(s) ago)
(RTTNews) - Spain's consumer price inflation remained stable in August and retail sales growth ...Full Story»

U.S. Consumer Prices Increase In Line With Estimates In July (10 hr(s), 15 min(s), 18 sec(s) ago)
(RTTNews) - Consumer prices in the U.S. increased in line with economist estimates in the month of ...Full Story»

Czech GDP Growth Eases Less Than Estimated (10 hr(s), 23 min(s), 18 sec(s) ago)
(RTTNews) - The Czech Republic's economic growth moderated less than initially estimated in t ...Full Story»