US Nonfarm Productivity Falls 4.6% in 2Q

US labour productivity declined for the second consecutive quarter as overall economic output contracted and employers spent more on labor as they added workers.

US nonfarm labor productivity is a measure of goods and services produced in the US per hour worked, fell at a seasonally adjusted annual rate of 4.6% annualized rate last quarter, after having declined by 7.4% in the first three months of the year, the report showed. Productivity fell at 2.5% pace from a year ago.

Large shifts in the composition of the workforce in the wake of the COVID-19 pandemic have made it harder to measure underlying productivity growth, which some economists put at about 1.0% or less, making the Fed’s fight against inflation more difficult.