Second-quarter US productivity was revised upward by Reuters

WASHINGTON (Reuters) – U.S. worker productivity rose faster than initially thought in the second quarter, reducing labor costs, suggesting inflationary pressures may continue to ease.

Nonfarm productivity, which measures hourly output per worker, rose at an annual rate of 2.5 percent in the latest quarter, the Labor Department’s Bureau of Labor Statistics said Thursday.

That was an upward revision from the 2.3 percent pace expected last month. The upward revision was in line with economists’ expectations. Productivity rose 0.4% in the first quarter. It advanced at an unrevised 2.7% pace from a year ago.

Unit labor costs – the price of labor for a single unit of output – rose at a 0.4% rate in the April-June quarter. This was revised down from the previously reported pace of 0.9%.

Labor costs rose 3.8 percent in the January-March quarter and at a 0.3 percent rate from a year ago.

The Federal Reserve is expected to begin cutting interest rates this month amid cooling inflation and labor market conditions.

Compensation grew at a 3.0% rate last quarter, revised down from the previously estimated 3.3% pace. It advanced at a rate of 3.1% compared to a year ago.