U.S. Productivity Growth Upwardly Revised To 2.3% In Q3

(RTTNews) - Labor productivity in the U.S. rose by more than previously estimated in the third quarter, according to a report released by the Labor Department on Wednesday, although the upwardly revised increase still came in below expectations.

The Labor Department said productivity increased by an upwardly revised 2.3 percent in the third quarter compared to the previously reported 2.0 percent growth. Economists had expected the pace of growth to be revised to 2.4 percent.

The upward revision to productivity, which is a measure of output per hour, came as the pace of output growth was upwardly revised to 4.9 percent from 4.4 percent.

At the same time, the report said the increase in hours worked was also upwardly revised to 2.5 percent from 2.3 percent.

Despite the upward revision, the productivity growth seen in the third quarter still reflects a slowdown from the 2.9 percent growth seen in the second quarter.

Meanwhile, the revised data showed that unit labor costs fell by 1.0 percent in the third quarter compared to the 0.3 percent increase that had been reported. Economists had expected costs to edge down by a revised 0.1 percent.

The drop in labor costs came as a 1.3 percent increase in hourly compensation was offset by the revised jump in productivity.

Real hourly compensation, which takes changes in consumer prices into account, inched up by just 0.2 percent in the third quarter.

The report said unit labor costs tumbled by a revised 3.7 percent in the second quarter amid a 0.9 percent drop in hourly compensation. Real hourly compensation plunged by 3.8 percent.

Compared to the same quarter a year ago, productivity increased by 1.0 percent in the third quarter, as output and hours worked climbed by 3.1 percent and 2.1 percent, respectively.

Unit labor costs were up by 1.2 percent year-over-year in the third quarter amid a 2.2 percent increase in hourly compensation.