U.S. Productivity Gains Accelerate While Pace Remains Tepid
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Worker productivity gains in the U.S. accelerated in the second quarter to a pace that’s still tepid by historical standards, a Labor Department report showed Wednesday.
Paltry productivity has been a disappointing characteristic of the current economic expansion that’s managed about 2 percent growth on average over the past eight years. Without more gains in efficiency, the economy’s so-called speed limit -- the pace at which it can expand without stoking inflation -- is reduced. Weaker output per hour has its roots in less corporate investment in equipment and a slower pace of innovation. Subdued productivity also helps explain why companies have been slow to boost worker pay that would boost the standard of living.