2018 Economic Calendar
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Productivity and Costs  
Released On 12/6/2018 8:30:00 AM For Q3(r):18
PriorConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR2.2 %2.3 %2.2 % to 2.8 %2.3 %
Unit labor costs - Q/Q change - SAAR1.2 %1.1 %0.6 % to 1.2 %0.9 %

The second estimate is little changed from the first as nonfarm productivity grew at an annualized and respectable 2.3 percent rate in third quarter. Output, at a strong 4.1 percent growth pace, and hours worked at only a moderate 1.8 percent increase are unchanged from the first estimate.

Unit labor costs grew at a slightly more subdued rate in the second estimate, at 0.9 percent for a 3 tenths decline from the first estimate. This reflects a 4 tenths downgrade in compensation to a growth rate of 3.1 percent.

Real compensation, which adjusts for inflation, is now 3 tenths lower at a 1.1 percent annualized growth rate during the quarter. But in year-on-year terms, that is the third quarter this year compared with the third quarter last year, real compensation is down 0.4 percent.

This is a mixed report showing a positive gain for output but stubborn weakness in real compensation.

Consensus Outlook
Following the modest revision to GDP, little change is expected for the second estimate of third-quarter nonfarm productivity, at a consensus 2.3 percent vs the first estimate's increase of 2.2 percent. Unit labor costs are expected to be revised to 1.1 percent vs an initial plus 1.2 percent.

Productivity measures the growth of labor efficiency in producing the economy's goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends.  Why Investors Care
Nonfarm productivity growth has been historically low in recent years raising questions over lack of business investment in new technologies, lack of motivation in the workforce, and the mis- measurement of service productivity. When productivity growth abates, unit labor costs tend to rise; when productivity growth accelerates, labor costs tend to fall.
Data Source: Haver Analytics

2018 Release Schedule
Released On: 2/13/75/36/68/159/611/112/6
Release For: Q4(p):17Q4(r):17Q1(p):18Q1(r):18Q2(p):18Q2(r):18Q3(p):18Q3(r):18

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