The
preliminary data from the U.S. Labour Department showed on Thursday that
nonfarm business sector labor productivity in the United States plunged 5.0
percent q-o-q in the third quarter of 2021, as output rose 1.7 percent q-o-q
and hours worked jumped 7.0 percent q-o-q (seasonally adjusted). This was the
largest drop in productivity since the second quarter of 1981 and was worse
than economists’ forecast for a 3.0 percent q-o-q decline after a revised 2.4
percent q-o-q gain in the second quarter (originally a 2.1 percent q-o-q gain).
In
y-o-y terms, the labor productivity went down 0.5 percent in the second
quarter, reflecting a 6.1-percent jump in output and a 6.7-percent surge in
hours worked.
Meanwhile,
unit labor costs in the nonfarm business sector in the third quarter climbed
8.3 percent q-o-q compared to a revised 1.1 percent q-o-q increase in the prior
quarter (originally a 1.3 percent q-o-q advance). Economists had forecast a 7.0 percent surge in third-quarter unit labor costs.
Unit
labor costs quarterly gain reflected a 2.9-percent q-o-q increase in hourly
compensation and a 5.0-percent q-o-q drop in productivity.
Compared
to the corresponding period of 2020, unit labor costs rose 4.8 percent,
as hourly compensation jumped 4.3 percent and productivity fell 0.5 percent.