U.S. employee productiveness elevated reasonably within the third quarter, leading to solely a gradual slowdown in labor prices that would solid a cloud over the inflation outlook.
Nonfarm productiveness, which measures hourly output per employee, elevated at a 2.2% annualized price final quarter, the Labor Division’s Bureau of Labor Statistics stated on Thursday.
Knowledge for the second quarter was revised decrease to point out productiveness rising at a 2.1% tempo as a substitute of the beforehand reported 2.5% price. Economists polled by Reuters had forecast productiveness advancing at a 2.3% price.
Productiveness elevated at a 2.0% tempo from a 12 months in the past. The average tempo of productiveness doesn’t bode properly for the inflation and rate of interest outlook.
Unit labor prices – the worth of labor per single unit of output – rose at a 1.9% price within the July-September quarter. That adopted a 2.4% tempo of growth within the second quarter. Labor prices elevated at a 3.4% price from a 12 months in the past.
The Federal Reserve is afterward Thursday anticipated to chop rates of interest once more, this time by 1 / 4 of a proportion level to the 4.50%-4.75% vary.
The U.S. central financial institution launched its coverage easing cycle with an unusually giant half-percentage-point price lower in September, the primary discount in borrowing prices since 2020. The Fed hiked charges by 525 foundation factors in 2022 and 2023.
Compensation rose at a 4.2% price final quarter after growing at a 4.6% tempo within the second quarter. It superior at a 5.5% price from a 12 months in the past.
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