Financial News: U.S. Labor Productivity Surges 2.2% In Q3, Slightly

U.S. Labor Productivity Surges 2.2% In Q3, Slightly Less Than Expected

11/07/2024 - 10:10:00 (RTTNews)

(RTTNews) - Labor productivity in the U.S. increased by slightly less than expected in the third quarter, according to a report released by the Labor Department on Thursday, while unit labor costs rose by much more than expected.

The Labor Department said labor productivity shot up by 2.2 percent in the third quarter after surging by a downwardly revised 2.1 percent in the second quarter.

Economists had expected labor productivity to jump by 2.3 percent compared to the 2.5 percent spike that had been reported for the previous quarter.

The sharp increase in labor productivity, a measure of output per hour, came as output soared by 3.5 percent compared to a 1.2 percent increase in hours worked.

"Productivity gains can unlock longevity in economic growth," said Nationwide Financial Markets Economist Oren Klachkin. "These data are somewhat encouraging, but we don't think the post-global financial crisis low productivity spell has been definitively broken."

Meanwhile, the report said unit labor costs surged by 1.9 percent in the third quarter after spiking by an upwardly revised 2.4 percent in the second quarter.

Unit labor costs were expected to rise by 0.5 percent compared to the 0.4 percent increase that had been reported for the previous quarter.

The much bigger than expected increase by unit labor costs came as hourly compensation soared by 4.2 percent in the third quarter after skyrocketing by 4.6 percent in the second quarter.

Real hourly compensation, which takes changes in consumer prices into account, surged by 3.0 percent in the third quarter after jumping by 1.7 percent in the second quarter.

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