U.S. productivity increased at a decent pace in the second quarter, a trend that could lead to higher wages if it continues.
The Labor Department said Thursday that productivity — or output per hour worked — rose 2.3% in the April-June quarter, down from 3.5% in the first three months of the year. The first quarter gain was the best in four years.
Greater productivity is a key ingredient in raising living standards. It enables companies to lift worker pay without raising prices on costumers.
The recovery, now in its 11th year, has been held back by historically weak productivity growth. It has grown at roughly two-thirds of its historical average since the recession began.
Yet productivity has picked up in recent quarters and expanded 1.8% in the past year.