Despite Slowing, US Productivity Growth Best Back-To-Back Quarters Since 2015

US Productivity growth in Q3 disappointed expectations, slowing from an upwardly revised 3.0% QoQ in Q2 to 2.2% in Q3...

Productivity gains in the U.S. posted the best back-to-back quarters since 2015.

Compared with a year earlier, productivity rose 1.3 percent, the same pace as in the second quarter and equal to the average annual rate from 2007 to 2017.

That’s well below the 3 percent pace of the late 1990s.

As unit labor costs rose more than expected (up 1.2% QoQ) in Q3.

Elsewhere in the productivity report, inflation-adjusted hourly earnings rose at a 1.4 percent annualized pace after a 0.3 percent increase, while hours worked rose 1.8 percent. Output advanced at a 4.1 percent rate, following 5 percent.

Among manufacturers, productivity rose at a 0.5 percent pace after a 1.2 percent rate in the prior quarter. That compares with an annual average gain of 0.7 percent from 2007 to 2017.