WASHINGTON - U.S. nonfarm productivity increased1.9% in the third quarter while business unit labor costs unexpectedly declined 0.1%, the Labor Department reported Thursday.
Unit labor costs, calculated by dividing hourly compensation by productivity, slipped as productivity outpaced hourly compensation. Hourly compensation increased 1.8% for the quarter ending Sept. 30, the largest increase since the third quarter of 2009. Increases in hourly compensation tend to increase unit labor costs and increases in productivity tend to reduce them.
Economists expected productivity to increase 0.9% and unit labor costs to increase 0.7% for the month, according to the median estimate from Thomson Reuters.
Productivity, which is measured as output per hour, fell 1.8% in the second quarter and increased 3.9% in the first quarter of this year. Unit labor costs increased 1.3% in the second quarter and fell 4.6% in the first quarter.
For the year ending Sept. 30, productivity increased 2.5% and unit labor costs fell 1.9%.
