US labour productivity flat in third quarter of 2016

A key gauge of the efficiency of US workers expanded at its fastest quarterly clip in two years during the third quarter of 2016, but even so was unchanged when compared with year-ago levels.

Labour productivity grew at a quarter-on-quarter annualised pace of 3.1% over the three months to September, according to the Bureau of Labor Statistics.

That followed drops of 0.2% and 0.6% during the previous two quarters and was the highest print since the 4.2% rise recorded in the third quarter of 2014.

However, economists had anticipated a slightly larger increase of 3.2%.

Together with a 3.8% increase in the rate of hourly compensation that saw unit labour costs edged higher by 0.7% (consensus: 0.3%) after having shot higher by 6.2% over the previous three months.

In comparison to the same quarter of one year ago, US labour productivity was flat while unit labour costs were 3.0% ahead.

"On a year-on-year basis, productivity was flat, returning to neutral after having been in negative territory briefly during Q2, and reflecting the poor performance of productivity in recent quarters. Following the recession, the underlying trend in productivity growth has been particularly subdued and at historically low levels.

"By contrast, unit labor cost growth has been picking up. Slow growth in output prices and fast rising unit labor costs have depressed unit profits for companies in recent years," Barclays's Blerina Uruci said in a research note sent to clients.