U.S. worker productivity increased to a modest rate in the second quarter after dropping in the January-March period, the government reported Friday.
The Labor Department said productivity-the amount of output per hour of work-accelerated to a 0.9 percent annual pace in the April-June quarter, reversing a 1.7 percent decline in the first quarter.
Labor costs rose at a 1.4 percent annual rate in the second quarter, reversing a 4.2 percent drop the previous quarter.
Productivity is the key to rising living standards. Strong productivity growth means companies can pay their employees more without raising the prices of their goods and services.
Weak productivity suggests that companies may need to hire because they cannot obtain more work from their existing employees.
Productivity growth has been weak recently, rising 1.5 percent in 2012 and 0.5 percent in 2011. Annual productivity growth averaged 3.2 percent in 2010 and 3.2 percent in 2009. In records dating from 1947, it has averaged about 2 percent annually.