US: Rising productivity mirrors recent GDP gains - Wells Fargo

Analysts from Wells Fargo, point out that nonfarm productivity increased at a 3.0 percent annual rate in Q3, lifting the year-over-year pace up to a still modest 1.5 percent. They explain that another strong output gain boosted productivity in Q3. 

Key Quotes: 

“Driven by a second consecutive quarterly gain in business output, at 3.8 percent, nonfarm productivity increased by the most in three years in the third quarter. Hours worked advanced at an annualized 0.8 percent pace.”

“The pickup in productivity growth was able to temper the impact of the strong gain in compensation costs, up at a 3.5 percent annual rate. As a result, unit labor costs rose 0.5 percent in Q3. While the debate over the wage outlook remains robust, we expect to see gains gradually climb in the year ahead as the U.S. economy continues to expand and firms face greater competition for increasingly scarce labor resources.”