US labour productivity growth caps unit labour costs in the third quarter

American workers' productivity easily outpaced forecasts during the third quarter, dampening the increase in unit labour costs.

Non-farm labour productivity grew at an annualised pace of 3.1% between the second and third quarters, according to the Bureau of Labour Statistics, as output increased at a 3.1% clip while hours worked only edged higher by 0.3%.

Economists had forecast that labour productivity would only increase by 1.5%.

In parallel, hourly compensation and real hourly compensation advanced by 3.4% and 1.7%, respectively.

Hence, the rise in unit labour costs was capped at 0.3% (consensus: 1.5%).

However, in comparison to a year ago productivity over the three months to September was flat while unit labour costs increased by 2.3%.

As if 1239 the yield on the benchmark 10-year US Treasury note was up by two basis points to 1.82%.