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© Reuters. FILE PHOTO: Workers information metal beams into place at a building website in San Francisco, California September 1, 2011. REUTERS/Robert Galbraith/File Photo
WASHINGTON (Reuters) – U.S. employee productiveness grew quicker than initially thought within the third quarter, placing extra downward stress on labor prices, a development that if sustained might contribute to decrease inflation.
Nonfarm productiveness, which measures hourly output per employee, elevated at a 5.2% annualized charge final quarter, the Labor Department’s Bureau of Labor Statistics mentioned on Wednesday. That was revised up from the beforehand reported 4.7% tempo and was the quickest because the third quarter of 2020.
Economists polled by Reuters had forecast productiveness development being revised greater to 4.9% charge.
The improve was telegraphed final week by revisions to gross home product knowledge, which confirmed the financial system rising at a 5.2% charge within the July-September quarter, as an alternative of the beforehand reported 4.9% tempo.
Productivity grew at an unrevised 3.6% tempo within the second quarter. Productivity expanded at a 2.4% tempo from a 12 months in the past, revised up from the beforehand estimated 2.2% charge.
Unit labor prices – the value of labor per single unit of output – decreased at a 1.2% charge within the third quarter. They had been initially estimated to have declined at a 0.8% tempo. Unit labor prices elevated at a 2.6% charge within the second quarter, revised down from the beforehand reported 3.2% tempo.
They rose at a 1.6% charge from a 12 months in the past, as an alternative of the 1.9% reported final month.
The reasonable annual labor prices bode nicely for the Federal Reserve’s battle to decrease inflation to the Fed’s 2% goal.
Following a raft of knowledge exhibiting subsiding inflation and easing labor market situations, monetary markets consider the U.S. central financial institution might begin slicing rates of interest as quickly as subsequent March. Since March 2022, the central financial institution has raised its benchmark in a single day rate of interest by 525 foundation factors to the present 5.25%-5.50% vary.
Hourly compensation rose at an unrevised 3.9% tempo final quarter. It elevated at a downwardly revised 4.0% charge from a 12 months in the past. Annual compensation was beforehand reported to have risen at a 4.2% charge.