US unit labour costs slip in Q3

Labour productivity in the States jumped over the three months to September, helping to push labour costs down.

According to the U.S. Department of Labor, non-farm labour productivity grew at a quarterly annualised pace of 4.7% during the third quarter (consensus: 4.3%).

As a result, unit labour costs dropped by 0.8% in quarterly annualised terms (consensus: 0.3%).

Commenting on the potential policy implications of the latest figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said that "the surge in productivity is welcome but not sustainable.

"Again, the q/q pace in Q3 is not sustainable, but if productivity growth can remain at our estimate of the trend pace - as it did in the years preceding Covid - then the downshift in wage growth now underway will keep unit labor costs growth at a pace consistent with the 2% inflation target, or even lower, once the Covid distortions fully fade."