Productivity Dips in Second Quarter

U.S. workers’ productivity slowed in the second quarter and labor costs rose, the Labor Department said Tuesday.

The 0.3% decrease in productivity followed a revised 0.6% decline the previous three months that was previously reported as a 1.8% gain.

Productivity is a measure of how much an employee produces for every hour of work.

Economists had forecast a 0.9% decrease, Bloomberg reported. Labor costs rose 2.2%, less than the 2.4% forecast, Bloomberg said.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.