Productivity at a Two-Year High

Today’s report on nonfarm productivity and unit labor costs was a revision report but it was lifted higher. Third-quarter productivity was revised to 2.9% and unit labor costs to -1.9%. Dow Jones had estimates of 2.8% on productivity. This report from the Labor Department is not expected to have any impact at all on Friday’s key unemployment report for the month of November.

The good news, even if this was more or less in-line with estimates, is that the productivity was the best report in about two years. Unfortunately, productivity competes with unemployment in theory. If employers are running a tight ship and can get more productivity out of an existing workforce, they may not rush to add workers.

JON C. OGG