By Greg Robb
WASHINGTON (MarketWatch) - Productivity of the U.S. non-farm business sector fell at a 0.9% annual rate in the second quarter from a 3.9% gain in the first quarter, the Labor Department estimated Tuesday. Economists were expecting productivity to decline 0.4% in the second quarter. Output increased at a 2.6% annualized rate while hours worked rose 3.6% in the second quarter. Unit labor costs - a key inflationary signal - rebounded at an annual rate of 0.2% in the second quarter after a sharp 3.7% decline in the first quarter. Real hourly compensation was flat. On a year-on-year basis, productivity slowed to a 3.9% increase after a 6.3% rate in the first quarter. Unit labor costs are down 2.8% year-over-year compared with a 2.7% drop in the first quarter.
