WASHINGTON — U.S. Q3 nonfarm productivity revisions were favorable and about as expected, reflecting a better GDP gain amid slow growth in hours.

Q3 nonfarm productivity now stands at a 2.9% increase (originally a 1.9% gain) and unit labor costs fell 1.9% (originally a 0.1% dip). The upward growth revisions and cuts in personal income in the GDP revision completely explain the changes.

There is now a 4.2% gain in Q3 output and a slower 1.3% advance in hours worked. Productivity is output per hour.

Productivity increased 1.7% over the year, slightly below its 60-year average, and ULC is a negligible 0.1% higher over the year.

These suggest corporate profit margins should remain positive. The data also help explain a somewhat cautious consumer: the 60-year average advance is up 2.9% for ULC.

Manufacturing productivity was a weak spot in the report — it fell 0.7% on declining output. Manufacturing ULC was up 3.2% even as output fell.

 

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