Gains in compensation out pace gains in productivity in the quarter WASHINGTON, Aug. 16 (UPI) -- The cost of labor in non-farm businesses rose 1.4 percent in the second quarter on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics said. The rising labor costs were attributed to a 2.3 percent rise in hourly compensation and a 0.9 percent rise in productivity. Both compensation and unit labor costs rose 1.6 percent over the last four quarters, the bureau said in a report released Friday. Manufacturing productivity rose 2.7 percent in the quarter with output up 0.1 percent and hours worked down 2.6 percent. For manufacturing firms, unit labor costs rose 1.4 percent from quarter to quarter and dropped 0.4 percent from the second quarter of 2012. By comparison, unit labor costs fell 4.3 percent in the first quarter due to a sharp drop in hourly compensation and a 0.5 percent gain in productivity, the bureau said.