US unit labour costs slip in Q3

(Sharecast News) - Labour productivity in the States jumped over the three months to September, helping to push labour costs down. According to the U.S. Department of Labor, non-farm labour productivity grew at a quarterly annualised pace of 4.7% during the third quarter (consensus: 4.3%).

As a result, unit labour costs dropped by 0.8% in quarterly annualised terms (consensus: 0.3%).

Commenting on the potential policy implications of the latest figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said that "the surge in productivity is welcome but not sustainable.

"Again, the q/q pace in Q3 is not sustainable, but if productivity growth can remain at our estimate of the trend pace - as it did in the years preceding Covid - then the downshift in wage growth now underway will keep unit labor costs growth at a pace consistent with the 2% inflation target, or even lower, once the Covid distortions fully fade."