U.S. Worker Productivity Hits Six-Year High

4 09 2009

The Labor Department released the report this week saying that U.S. workers are more productive, but employee earnings are falling.

Worker productivity β€” basically the output of work per hour β€” increased at an annual rate of 6.6 percent during the second quarter, the best performance since summer 2003 and easily exceeding the 6.4 percent gain economists expected.

Aggressive cost-cutting efforts helped boost the bottom line and keep companies operating, but labor costs declined an alarming 5.9 percent β€” the largest drop since second-quarter 2000 and slightly more than the 5.8 percent a month ago.

For cost-conscious companies it’s good news, but consumer spending accounts for 70 percent of the economy and lower pay could hurt the recovery.

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