US labor productivity picks-up as expected in Q2, as does hourly compensation

US labour productivity picked-up noticeably over the second quarter, but not by enough to dampen unit labour cost growth when compared with the same period one year ago.

Non-farm labour productivity per hour in the States expanded at a 2.9% clip in quarterly annualised terms over the three months to June, according to the Department of Labor.

That followed an increase of only 0.3% over the first three months of the year and was driven by a jump in output per hour from 2.6% to 5.0%.

Productivity growth was also exactly in-line with economists' forecasts.

In parallel, when compared to the prior quarter, unit labour costs declined by 1.0% (consensus: -0.9%).

However, in year-on-year terms hourly wage growth was running at up by 3.2%, versus productivity at just 1.3%, leaving unit labour costs up by 1.9%.

For her part, Blerina Uruci at Barclays Research noted that the "signal" from the year-on-year rate of growth in hourly compensation in Thursday's report was stronger than that from average hourly earnings.

When adjusted for the rate of inflation, so-called 'real' hourly compensation was 0.5% higher.