U.S. unit labor costs flat, productivity rises

WASHINGTON Thu Sep 5, 2013 8:34am EDT

WASHINGTON (Reuters) - U.S. labor costs were flat in the second quarter, a sign of minimal inflationary pressures in the economy that could fan concerns inflation is too low.

The reading from the Labor Department on Thursday, which revised down an earlier estimate for the data, was well below the 0.8 percent gain analysts were forecasting in a Reuters poll.

At the same time, the report showed productivity rose 2.3 percent during the period, which was a bigger gain than expected and gave a positive sign for the outlook for wages.

U.S. incomes have been depressed since the 2007-09 recession, which has helped keep inflation rates low.

Over the last year, inflation has been well below the U.S. Federal Reserve's 2 percent target, which has led some analysts to expect the Fed will be slow about winding down a bond-buying economic stimulus program.

Fed Chairman Ben Bernanke warned in July that very low inflation raises the risk the economy can slip into a downward spiral of falling prices and wages known as deflation. Fighting deflation is extremely difficult for policymakers.

(Reporting by Jason Lange; Editing by Krista Hughes)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Recommended Newsletters

Reuters U.S. Top News
A quick-fix on the day's news published with Reuters videos and award-winning news photography and delivered at your choice of one of four times during the day.
Reuters Deals Today
The latest Reuters articles on M&A, IPOs, private equity, hedge funds and regulatory updates delivered to your inbox each day.
Reuters Technology Report
Your daily briefing on the latest tech developments from around the world from Reuters expert tech correspondents.