US worker productivity increased more than expected in the second quarter, rising at a 2.3% annualized rate, while unit labor costs grew at a slower 0.9% rate. This improvement in productivity, coupled with moderated labor cost growth, suggests diminishing inflationary pressures. The data provides further evidence for the Federal Reserve that the risk of inflation reacceleration is decreasing, potentially supporting the case for interest rate cuts in the near future. These trends indicate that companies are successfully managing elevated operating costs and maintaining economic growth despite high borrowing costs.