Growth in productivity disappoints

Productivity climbed at a slower-than-expected pace in the second quarter as the highest year-on-year jump in U.S. labor costs in seven years restrained its growth and kept inflation worries alive.

The Labor Department reported that productivity, the gauge of how much any given worker can produce in an hour, rose at a 1.8% annualized pace in the second quarter.

That was somewhat slower than Wall Street economists had expected and came on the heels of a 0.7% advance at the start of this year as the economy nearly stalled.

Unit labor costs, a key measure of inflation and profit pressures, grew at a 2.1% pace.