U.S. productivity was weaker than previously thought in the second quarter, increasing at a 2.3 percent annual rate rather than the 2.5 percent pace reported last month, the government said Thursday.
The Labor Department also said labor costs were far more weaker than previously reported, with unit labor costs—the price of labor for any given unit of production—falling at a 0.1 percent annual rate instead of the 0.6 percent increase published last month.
Unit labor costs had increased at an 11.6 percent annual rate in the first quarter. Compared to the second quarter of 2013, unit labor costs rose 1.7 percent.
The revised labor costs could allow the Federal Reserve (Fed) to continue holding interest rates at historic lows near zero percent. The central bank closely watches wage growth as it considers when to increase rates. Investors do not expect a rate increase until mid-2015.