WASHINGTON – Third quarter nonfarm productivity was up 3.0%, slightly ahead of the 2.9% gain expected and the largest increase since the third quarter of 2014.
Unit labor costs were up 0.5%, a smaller gain than the 0.6% rise expected. Revisions to second quarter data were very minor, with productivity still up 1.5% and unit labor costs now up 0.3%, so the report was basically as expected.
Third quarter output rose at a 3.8% rate, compared with the 3.9% rate now reported for the previous quarter. Hours worked rose only 0.8% in the third quarter after 2.4% in the second quarter.
Compensation rose 3.5% in the third quarter after an unrevised 1.8% gain in the second quarter, and was up 1.5% after inflation adjustment. Real compensation rose 2.1% in the second quarter.
The year/year pace of productivity growth accelerated modestly to 1.5% in the third quarter from 1.3% in the second quarter, reaching its highest point since the second quarter of 2015. Unit labor costs now stand 0.1% lower than they were a year ago, a slight improvement from the 0.2% year/year rate of decline in the second quarter, but an indication that labor cost inflation has slowed.
