US productivity rises faster than expected in second quarter

WASHINGTON, Aug 6 (Reuters) - U.S. ‌worker productivity ​grew ​faster than expected in the second quarter and further gains are likely as businesses invest in ‌artificial intelligence, which is expected to keep wage ⁠inflation contained.

Nonfarm productivity, which measures hourly output per worker, increased at ‌a 1.4% annualized rate last ‌quarter after advancing at an upwardly revised 0.8% pace in the January-March quarter, the Labor Department's Bureau of ​Labor Statistics said on Thursday. Economists polled by Reuters had forecast productivity would grow at a 0.6% ⁠rate following a previously reported 0.3% pace of increase in the first quarter.

Productivity ​grew at a 2.2% rate from a year ago. It has grown at a 2.1% rate ​from the fourth quarter of 2019 ‌through the second quarter of 2026. Economists and policymakers are anticipating an AI buildout will ⁠boost productivity and curb inflation through a reduction in labor costs.

Unit labor costs — the price of labor per single unit ⁠of output — increased at a 1.3% rate last quarter, after rising at ​a downwardly revised 1.3% pace in the first quarter.

Economists had expected unit labor costs to increase at a 2.1% rate last quarter ‌after a previously reported 1.8% pace of growth in the January-March quarter. Labor costs grew ‌at a 1.4% rate from a year ago. Hourly ⁠compensation increased at a ‌2.7% rate last quarter ​and grew at a 3.7% pace from a year ago.

(Reporting by Lucia Mutikani; Editing by Paul ‌Simao)

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