US worker productivity rose at 3.0% QoQ in Q3 – the best since 2014.
Unit labor costs rose at 0.5% annualized rate in Q3 (est. 0.4%) following 0.3% pace in Q2.
Output rose at a 3.8 percent rate following 3.9 percent.
Hours worked rose at a 0.8 percent pace after 2.4 percent.
The latest figure compares with a 1.2 percent average over the period spanning 2007 to 2016. Weak productivity helps explain why companies are reluctant to raise workers’ wages, even as profit margins have improved.
However, among manufacturers, productivity crashed 5% QoQ – the biggest drop since Q1 2009, when the economy was in recession – after rising 3.4% in Q2.
Let’s hope that is storm-related.