Labour productivity among Canadian workers in the private sector rose by a stronger-than-expected 0.5 per cent in the second quarter, the biggest gain in six quarters, Statistics Canada said on Friday.

Productivity is a measure of real gross domestic product per hour worked, and analysts had expected Canada to achieve just 0.3 per cent growth.

On an annual basis, Canada’s productivity growth doesn't look as strong – up just 0.1 per cent since the same period last year, a result of very poor growth in 2012.

U.S. workers achieved an annualized productivity growth of 2.3 per cent in the second quarter, reflecting flat wages and a boost in the number of jobs, according to the U.S. Labor Department.

Improved outlook may hasten Fed pullout

The U.S. recently revised its GDP growth figures upward, to a 2.5 per cent economic growth rate in June from the 1.7 per cent annual rate estimated in May.

That revision, reflecting a stronger economy, helped boost annualized second quarter productivity numbers from the 0.9 per cent estimated in August to 2.3 per cent.

On average, in numbers dating back to 1947, U.S. productivity grows two per cent a year.

The improved outlook may encourage the U.S. Federal Reserve to begin slowing its bond purchases of $85 billion US a month.

Both productivity and employment growth indicators released today show a strengthening U.S. economy, leading some analysts to say the conditions are right for the Fed to begin tapering.

2012 saw steady decline in productivity

U.S. actual annual productivity growth for the quarter was 0.3 per cent. Canada usually lags the U.S. in this important measure, a puzzle for economists and business analysts.

In 2012, there was a steady decline in Canadian productivity and in the last quarter of 2012 and first quarter of 2013, the rise was a slight 0.1 per cent.

But in the three months to June 30, arts and entertainment, utilities, finance and insurance and agriculture saw strong productivity growth. Meanwhile mining, oil and gas and real estate sectors saw output per man-hour decline.

Average number of hours worked didn't increase at Canadian businesses, but wages were up 1.1 per cent, according to Statistics Canada.

On average, in numbers dating back to 1947, U.S. productivity grows two per cent a year.

The improved outlook may encourage the U.S. Federal Reserve to begin slowing its bond purchases of $85 billion a month. Both productivity and employment growth indicators released today show a strengthening U.S. economy, leading some analysts to say the conditions are right for the Fed to begin tapering.