The Labor Department reported on Thursday that nonfarm hourly output per worker, grew at a 3.1 percent annual rate. This is the first grow in three straight quarters of decline. Economist had only predicted productivity to rise at a 2.0 percent rate.
With this productivity growth came an acceleration in GDP as well. This increase came despite total hours worked rising only at a 0.3 percent pace, which suggests this quarterly increase suggests a pickup in wage growth. Labor costs rose at a 2.3 percent rate compared to the same period of 2015.
Though good news, productivity is unchanged compared to the third quarter of 2015.
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It's good to see that the GDP is growing faster than it was in April-June growing to 2.9% from 1.4%. Output per worker is also up 3.4% which is the fastest since the third quarter in 2014. So these signs seem to signal that we are slowly returning to the long run equilibrium levels after the recession fluctuated our position, but it looks like it will still take a few years.
ReplyDeleteIt is interesting that the increase in output came even though total hours worked was only rising at 0.3% in the third quarter. Especially since this is slower than the rate in the second quarter. But yeah I agree. It is definitely a step in the right direction, it just looks like we still have a ways to go.
ReplyDeleteLabor costs rose 2.3% compared to the same quarter in 2015 while hours worked only increased by 0.3%. Maybe firms are paying bonuses, higher wages, or spending more on employee benefits.
ReplyDeleteThis increase in productivity is great, but I think it is hard to sustain this high amount for more than one quarter. It's always nice to see the economy growing, but more needs to be done to continue it for longer periods of time.
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