U.S. worker productivity was stronger than initially thought in the second quarter, leading to a modest increase in labor costs that could keep inflation muted in the near term.
The Labor Department said on Thursday that nonfarm productivity, which measures hourly output per worker, rose at a 1.5 percent annualized rate. Productivity was previously reported to have increased at a 0.9 percent pace in the April-June period. It grew at a 0.1 percent rate in the first quarter.
Economists polled by Reuters had expected that productivity would be revised up to a 1.3 percent pace in the second quarter.
The government last week revised up second-quarter gross domestic product growth to a 3.0 percent rate from a 2.6 percent pace.
Despite the upward revision to productivity, the trend remains weak, suggesting it would be difficult to achieve robust economic growth. President Donald Trump has vowed to boost annual growth to 3 percent through tax cuts, infrastructure spending and regulatory rollbacks.
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