Worker productivity in the US grew in the second quarter as employers cut jobs to weather the jump in raw-material expenses. Efficiency, a measure of how much an employee produces for each hour of work, rose at a 2.2 percent annual rate, less than forecast, after a 2.6 percent gain in the prior quarter, the Labor Department said on Friday in Washington. Labor costs climbed at a 1.3 percent pace, less than anticipated. Employers eliminated 165,000 jobs from April through June to shore up profits, and still managed to get more output with fewer workers. Gains in productivity help lower inflation and bolster the Federal Reserve's forecast that prices will moderate. “Productivity still looks pretty good,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. “It's encouraging on the inflation front. We are seeing good cost control from businesses. It's good news for the Fed.'' Treasuries fell in the minutes following the report before turning higher.
