Productivity Reaches Two-Year High

Second-quarter U.S. worker productivity rose at an annual rate of 2.6%, the most in almost two years, the Labor Department said Thursday.

Productivity is a measure of how much an employee produces for every hour of work. The level was higher than a previous estimate of 1.8% and than the 0.7% first-quarter gain.

The second-quarter increase was higher than economists’ forecasts of a 2.4% rise, Bloomberg reported.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.