U.S. productivity up 2.3%

Productivity of businesses in the U.S. grew at an annual rate of 2.3% in the second quarter of 2008, according to a report released this morning by the Department of Labor’s Bureau of Labor Statistics. While the data was not as strong as the 2.5% rate that had been predicted by economists polled by Thomson Reuters, the bureau did describe the growth as “solid.” Unit labor costs, which are used as a gauge of inflation and profit pressures, rose 1.3%. The statistic is closely watched by the Federal Reserve and indicates the increasing inflationary pressures that the central bank’s monetary policy committee is facing. The report also showed a 1.4% decline in manufacturing, reflecting a 3.5% decline in durable goods manufacturing and a 0.7% increase in nondurable goods manufacturing.