US labour productivity beat forecasts in the third quarter
US labour productivity was far stronger in the third quarter than economists had expected, figures released on Thursday showed.
According to the Bureau of Labor Statistics, non-farm labour productivity - a gauge of how much each worker can produce in an hour - grew at 1.6% quarter-on-quarter in the three months to September beating expectations for a gain of 0.1%.
That was driven by a 1.2% increase in output, although the number of hours worked dropped 0.5%.
Given that real hourly compensation rose by 3%, that made for a 1.4% gain in so-called unit labour costs in the third quarter, compared with a 2.2% consensus forecast.
The previous month´s estimated rate of growth in labour productivity was revised higher to 3.5% from 3.3% and that of unit labour costs to -1.8% instead of -1.4%.
However, in year-over-year terms productivity rose just 0.4% versus a 2% rise in labour costs.
"Given that this combination of subdued growth and declining employee hours resulted in a better-than-expected outcome for productivity growth, we do not take too much comfort from today’s upside surprise in productivity growth. On a y/y basis, productivity rose 0.4% (from 0.8%), slowing further from an already weak trend.
"Unit labor costs, on the other hand, picked up some momentum, rising 2.0% y/y (from 1.6%). Productivity growth has been particularly weak in recent years, and we do not yet see evidence in the data that it is about to break through from that trend in the near term. In addition, a combination of solid unit labor cost rises and subdued output price growth has led to a squeeze in unit profits for companies," Blerina Uruci at Barclays told clients.