2018 Economic Calendar
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Productivity and Costs  
Released On 8/15/2018 8:30:00 AM For Q2(p):18
PriorPrior RevisedConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR0.4 %0.3 %2.5 %1.1 % to 3.0 %2.9 %
Unit labor costs - Q/Q change - SAAR2.9 %3.4 %-0.2 %-0.6 % to 2.4 %-0.9 %

Growth in output jumped at the same time that hours worked slowed, making for a very strong 2.9 percent annualized rate for second-quarter nonfarm productivity that is right at the top of Econoday's consensus range. The second quarter also saw a slowing in compensation which made for a sharp 0.9 percent decline in unit labor costs.

Output rose at a very hot 4.8 percent rate in the quarter, up from an already solid 2.6 percent rate in the first quarter. Hours worked rose at a 1.9 percent rate vs the first quarter's 2.6 percent. But workers aren't benefiting much from all the production as nominal compensation fell to a 2.0 percent rate from 3.7 percent in the first quarter. When adjusting for inflation, real compensation rose 0.3 percent and was little changed from the first quarter's 0.2 percent rate.

Wages aside, this is a very strong report that speaks to the robust health right now of the business sector.

Consensus Outlook
The consensus for the first estimate of second-quarter productivity is a gain of 2.5 percent vs a 0.4 percent increase in the first quarter, with unit labor costs seen falling 0.2 percent vs the first quarter's 2.9 percent increase. The second quarter's strong output will help lift productivity and help hold down labor costs.

Productivity measures the growth of labor efficiency in producing the economy's goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends.  Why Investors Care
Nonfarm productivity growth has been historically low in recent years raising questions over lack of business investment in new technologies, lack of motivation in the workforce, and the mis- measurement of service productivity. When productivity growth abates, unit labor costs tend to rise; when productivity growth accelerates, labor costs tend to fall.
Data Source: Haver Analytics

2018 Release Schedule
Released On: 2/13/75/36/68/159/611/112/5
Release For: Q4(p):17Q4(r):17Q1(p):18Q1(r):18Q2(p):18Q2(r):18Q3(p):18Q3(r):18

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