US: Nonfarm productivity beats expectations in Q3 - Natixis

Thomas Julien, Research Analyst at Natixis, notes that the US nonfarm productivity rose faster than expected in Q3, gaining 3.1% QoQ ar after 3 quarters in negative territory.

Key Quotes

“The rise was driven by the acceleration of growth (+3.4% for nonfarm output) and the slowdown in hours worked (+0.3%). Therefore, even though compensation per hour continued to increase at a solid pace (3.4%), unit labor costs decelerated during the quarter (at 0.3% QoQ ar). Real compensation per hour rose by a strong 1.7% QoQ ar.

In short, the rebound in productivity is encouraging even though on a yearly basis the trend remains depressed. In the near term, we are looking at a gradual strengthening of US productivity. All in all, such numbers are consistent with corporate profits moving slightly up in Q3.”