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Thursday, November 2, 2017

Gain In Productivity Helps Hold Down Labor Costs

Output rose at a very solid 3.8 percent annualized rate in the third quarter and it only took a 0.8 percent increase in hours worked, a favorable combination that boosted nonfarm productivity to a higher-than-expected 3.0 percent rate in the third quarter. The gain in productivity helped hold down unit labor costs to a slightly lower-than-expected 0.5 percent annualized rate. Rising growth together with the rise underway in equipment investment is the necessary combination to improve productivity and keep down costs.

Recent History Of This Indicator:
Third-quarter GDP of 3.0 percent points to strength for third-quarter productivity. Forecasters see nonfarm productivity rising 2.5 percent vs the second-quarter gain of 1.5 percent with unit labor costs at plus 0.6 percent vs the prior quarter's 0.2 percent rise.

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