US Q3 Labor Costs Rise Less Than Expected

Korea Economic Daily

Summary

The U.S. Department of Labor announced that labor costs in the third quarter rose at an annual rate of 0.8%, less than expected.
It was interpreted that it was not a major cause of inflation, as it was lower than the economists' expected 1.5%.
In contrast, the productivity of non-farm business workers rose at an annual rate of 2.2%, drawing attention.

Initially revised from a 1.9% increase to a 0.8% increase

Labor productivity increased at an annual rate of 2.2%

U.S. labor costs in the third quarter rose at an annual rate of 0.8%, falling short of the initial forecast. In contrast, productivity increased at an annual rate of 2.2%.

On the 10th (local time), the U.S. Department of Labor's Bureau of Labor Statistics announced that unit labor costs, the cost for a company to produce one unit of output paid to employees, increased at an annual rate of 0.8% in the last quarter. The Department of Labor initially reported a 1.9% increase in Q3 labor costs, but the actual increase was much smaller.

Economists surveyed by Reuters had expected the labor cost growth rate to be revised down to 1.5% from the initially announced 1.9% in the third quarter.

Labor costs have been cited as one of the causes of U.S. inflation, but since they were lower than expected, they were not considered a major cause of inflation in the third quarter.

The Department of Labor stated that the significant downward revision from the initial figures reflects a downward revision in hourly compensation.

On the other hand, the productivity of U.S. workers increased slightly in the third quarter. Productivity, which refers to the hourly output per worker in non-farm businesses, increased by 2.2% annually in the third quarter, following a 2.1% increase in the previous quarter.

Guest reporter Kim Jeong-ah kja@hankyung.com