U.S. worker productivity slowed last quarter and labor costs rose more than expected, suggesting inflation pressures persist as the economy cools.
The slower gains in efficiency reflect a cooling in the economy during the quarter.
The bigger than expected rise in labor costs, which account for about two-thirds of the cost of goods and services, may heighten concerns that inflation will accelerate as businesses lift prices to compensate.
Economists expected second-quarter productivity to grow at an annual rate of 1.6 percent, up from the 1.1 percent figure the government initially reported last month.
Labor costs rose at a 4.9 percent pace, compared with a revised 9 percent rise in the first quarter that was the biggest since 2000.
Gold futures fell early Wednesday as dollar strength and renewed weakness in the oil market gave traders an excuse to lock in some of the metal's prior-day gains.
Oil futures continued to pull back as traders eyed ample U.S. supplies of petroleum products - especially now that the summer driving season is over - and what appears to be a particularly calm hurricane season.
On the political front, concerns about the dispute between the West and Iran over its uranium enrichment program remained in the background ahead of talks between Tehran and the European Union.
Index of activity in the service sector, which includes banking, construction, retail and travel, rose in August from July faster than analysts expected,stood at 57.0 in August, versus 54.8 a month earlier.
A reading of 50 or more indicates expansion, while below 50 indicates contraction.