Unit labor costs – a gauge of the labor-related cost for any given unit of output – fell at a 1.4 per cent rate in the third quarter, roughly double the originally estimated fall, underscoring the lack of wage-related inflation pressures in the economy. Unit labor costs had risen at a 2.0 per cent pace in the second quarter.
US labor productivity rose at a 3.0 per cent annual rate in Q3 2013 after increasing at a 1.8 per cent pace in the second quarter, the U.S. Bureau of Labor Statistics said today, driven by a 4.7 per cent rise in output and 1.7 percent in hours worked.
This is the largest increase in the quarterly series since a 4.7 percent gain in the fourth quarter of 2009. From the third quarter of 2012 to the third quarter of 2013, productivity increased 0.3 percent as output and hours worked rose 2.1 percent and 1.8 percent, respectively.
The report is the latest to suggest the economy picked up speed in the summer, as more Americans got jobs and the effects of government spending cuts and tax increases eased. Output grew at a 4.7% rate in the third quarter, the fastest pace since the first quarter of 2012.
The Federal Reserve monitors productivity and labor costs for any signs that inflation could pick up. Mild inflation has allowed the Fed to keep short-term interest rates at record lows and to buy bonds to try to keep long-term rates down. Fed officials meet Tuesday and Wednesday to assess their stimulus policies.
- U.S. Productivity Up 3% in Third Quarter; Labor Costs Down 1.4% – WSJ
- U.S. productivity rises by most in nearly four years – The Globe and Mail
- U.S. Third Quarter Productivity and Cost Report – Bloomberg
- US worker output rises at best pace in 4 years – Boston.com