U.S. productivity rose at 2.9% rate in Q2

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The Labor Department on Thursday affirmed last month’s report that U.S. productivity increased at an annual rate of 2.9% in the second quarter.

The government reported few revisions to the productivity figures released in August. The jump in productivity followed a tepid 0.3% gain in the first quarter. Labor costs slipped 1% in the April-June quarter, instead of the 0.9% that was initially reported.

Productivity is a measure of output for each hour worked. It largely determines how fast the economy can grow and how much living standards can increase. Because productivity has been weak throughout this nine-year expansion, overall economic growth has been relatively sluggish. Many economists view the strong second quarter growth as a blip rather than a lasting acceleration.

Separately, the Labor Department said Thursday that 203,000 people applied for jobless benefits last week, the lowest level since December 1969.

Jobs data

U.S. businesses added 163,000 jobs in August, a private survey found, a decent gain that suggests that employers are confident enough to keep hiring.

Payroll processor ADP says the job gains were the fewest since October. But last month’s hiring is still enough to lower unemployment over time. The economy is expanding at a healthy pace, spurred by tax cuts and robust consumer spending.

The ADP figures come a day before the government will release its official jobs data for August. Economists have forecast that Friday’s report will show employers added a solid 189,000 jobs, according to data provider FactSet.

ADP compiles hiring data from millions of companies that are clients of its payroll services. Its figures frequently diverge from the government’s data but tend to approximate them over time.

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