Nonfarm business productivity rose at an annual rate of 1 percent in the second quarter of 1985, the Labor Department reported yesterday, with especially strong gains in the manufacturing sector because of competitive pressure from imports.
Meanwhile, there was good news on the inflation front because unit labor costs moderated, according to the department's Bureau of Labor Statistics, which was issuing final figures revised from preliminary data released a month ago.
Output in nonfarm business rose at an annual 2.2 percent rate compared with the first quarter, while hours worked rose 1.2 percent. The second-quarter increase in productivity represented an upward revision from the 0.5 percent preliminary figure.
The second-quarter performance indicates that productivity growth is holding up in the face of the slowdown in the economy, said Allen Sinai, chief economist at Shearson Lehman Brothers Inc.
Manufacturing productivity rose at an annual rate of 7.5 percent, because of intense competitive pressure on U.S. industry from imports. Unit labor costs in manufacturing fell 2.5 percent and in non-farm business they rose 2.3 percent from April to June.
The figures improved from first-quarter performance, when productivity declined 3.1 percent and unit labor costs rose 8.4 percent, raising some fears about the possibility of renewed inflation.