U.S. workers increased their
in the second quarter even more than was originally estimated, the government reported Wednesday.
Worker productivity rose at a revised 5.7% annual clip in the second quarter, compared with the 5.3% annual rate initial estimate released in August, the
said. Productivity grew at a rate of 1.9% in the first quarter.
The report suggests that the output of the average worker is rising faster than average wages. While the initial estimate was much higher than economists anticipated -- the consensus among economists polled by
predicted that productivity would rise 4.3% -- the revised figure also exceeded expectations. According to the
poll, economists predicted a revised increase of 5.4%.
Wednesday's figure gives fresh evidence supporting the new economy mantra that an increase in productivity has severed the traditional relationship between inflation and unemployment, which posits that low unemployment will eventually lead to inflation because workers will demand wage increases. This trend of rising productivity is a phenomenon that has largely allowed the nation to enjoy historically low unemployment without the serious threat of inflation.
This, coupled with other signs the economy is cooling, is likely to reinforce the view that
policymakers will hold off on further interest rate increases in the near term. In an effort to avoid an increase in price inflation, the Fed has raised interest rates six times over the last 14 months. It held off at its most recent
meeting, Aug. 22, amid signs that its rate hikes had slowed the economy. A host of recent economic data, most notably figures that show a slowdown in the nation's factories, indicates the economy has put on the brakes.
In addition, the
unit labor costs
, a broad measure of how much businesses pay per unit of output, fell a revised 0.4% in the second quarter, compared with an initial estimate of 0.1%. Economists expected a revised estimate of a 0.2% fall.