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August 7, 2007 9:30 AM, EDT

Second-Quarter Productivity Rises 1.8%

Second-quarter U.S. worker productivity rose 1.8%, the Labor Department said Tuesday.

Productivity is a measure of how much an employee produces for every hour of work. The level compared with a revised 0.7% gain in the first quarter that was less than forecast.

The second-quarter increase is less than economists’ forecasts of a 2% rise, Bloomberg reported.

Labor costs rose at 2.1%, more than forecast, Bloomberg said.

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