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U.S. business productivity fell for the first time in eighteen months in the second quarter. Labor costs also hardly rose, underlining the halting pace of economic recovery.
The Labor Department says productivity declined at an annual rate of 0.9 percent after rising at a revised 3.9 percent pace in the first quarter. It was the first drop in productivity, or hourly output per worker, since the fourth quarter of 2008. The slowdown suggests corporate profits could start coming under pressure.
The report also says businesses may have to step up hiring in order to keep expanding production.