Worker productivity and labor costs rise in second quarter

Worker productivity in the U.S. rose more than expected in the second quarter and labor costs grew at a modest pace over the same period.

A gauge of worker output per hour grew at a 0.9% annual pace between April and June, the Labor Department said Friday.

That beat a median forecast of 0.6% in a Bloomberg survey of economists.

Labor costs grew a modest 1.4% in the second quarter, up from the 4.2% drop the previous quarter.

ASK LAZ: David Lazarus answers reader questions

Analysts said the numbers suggest U.S. workers are reaching their limits of efficiency.

“Productivity is growing at an extremely slow pace,” Guy Berger, an economist at RBS Securities Inc. in Stamford, Conn., told Bloomberg. “We’re in an environment where businesses are finding it very difficult to eke out more from the labor they employ. We could see more hiring, but the bad news is, if you’re a worker, you’re seeing your paycheck barely go up.”

Experts don’t expect a hiring binge just yet since the U.S. economy grew by only a 1.7% annual rate the second quarter.

“Companies will have to start to increase their workforce and start hiring more aggressively should the upward trend in the economy continue,” Annalisa Piazza, an analyst at Newedge Strategy, told the Associated Press.

ALSO:

Wealthy people are less likely to retire, report says

Retirees facing declining standard of living in old age, study says

Retirement: Many Americans say they can’t retire until their 70s or 80s