By Margot Habiby Aug. 10 (Bloomberg) -- Crude oil tumbled the most in five weeks in New York after the Labor Department reported the productivity of U.S. workers fell in the second quarter, a sign the economy is struggling to recover. Oil dropped as much as 2.4 percent as the report showed the world’s largest economy lost momentum heading into the second year of the recovery, prompting companies to hold the line on employment. Federal Reserve policy makers meet today amid speculation they will issue a statement signaling whether the economy needs additional stimulus measures. The productivity report “is not good news and, if anything, suggests that the recession will be longer, not shorter,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The fact that the Fed meeting is today has concentrated people on the bearish economic news.” Crude oil for September delivery fell $1.67, or 2.1 percent, to $79.81 a barrel at 9:17 a.m. on the New York Mercantile Exchange. Earlier, prices touched $79.55, the lowest level since Aug. 2. Futures were down the most since July 1. Oil has risen 13 percent in the past year. The Labor Department’s measure of employee output per hour decreased at a 0.9 percent annual rate, the first drop since the end of 2008. The median forecast of economists surveyed by Bloomberg News projected a 0.1 percent gain. Labor costs rose at a 0.2 percent pace, less than estimated. To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.

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