Worker Productivity Slips 0.1 Percent

Workplace productivity slipped 0.1 percent in the April-June quarter, but it had little immediate effect on inflation, the government said Wednesday.

The Labor Department report showed that non-farm productivity eased because job growth boosted the number of hours worked. Productivity measures output per hours worked.

Output rose 4.2 percent from April through June, much faster than the 2.7 percent gain from January through March.

But hours worked also surged, up 4.3 percent, more than four times the 1 percent advance during the previous three months.

That resulted in a 3.8 percent jump in unit labor costs, more than twice the 1.5 percent increase in the first quarter. Unit labor costs are typically two-thirds of what consumers pay for a product.

In a separate report, the Commerce Department said business inventories increased a tiny 0.1 percent in June - a sign, analysts said, that companies were keeping their stockpiles lean.

The slight increase also occurred as sales slipped 0.5 percent, the first decline in five months.