2015 Economic Calendar
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Productivity and Costs  
Released On 9/2/2015 8:30:00 AM For Q2(r):2015
PriorConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR1.3 %2.8 %1.6 % to 3.3 %3.3 %
Unit labor costs - Q/Q change - SAAR0.5 %-1.2 %-1.4 % to 0.4 %-1.4 %

The upward revision to second-quarter GDP gave a strong lift to nonfarm productivity, up 3.3 percent at an annualized rate which is at the very top of the Econoday consensus and well up from plus 1.3 percent in the initial reading. This is the best performance since the fourth quarter of 2013.

The gain in productivity in turn drove unit labor costs 1.4 percent lower which is well down from the prior estimate of plus 0.5 percent and at the very low end of consensus and the sharpest drop since the second quarter of 2014. Output rose a sharp 4.7 percent in the quarter while hours worked rose only 1.4 percent with compensation up only 1.8 percent.

But year-on-year data tell a different story with productivity up 0.7 percent in the second quarter and labor costs up 1.7 percent. These readings reflect prior weakness in productivity tied to weak output in the first and fourth quarters.

And the productivity outlook for the ongoing third quarter is also soft with early GDP estimates at roughly plus 2 to 2.5 percent. For reference, second-quarter GDP came in at 3.7 percent, revised from a prior reading of 2.3 percent.

Consensus Outlook
The second estimate for productivity & costs is expected to show a rise in productivity growth to 2.8 percent from 1.3 percent reflecting the upward revision to second-quarter GDP. Higher productivity points to lower unit labor costs which are expected to fall 1.2 percent.

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 remained healthy during this expansion, but it has prevented employment from growing very fast and this hurt income growth to some extent. Unit labor costs tend to fall when productivity growth accelerates and then rises as productivity growth abates.
Data Source: Haver Analytics

2015 Release Schedule
Released On: 2/53/55/66/48/119/211/512/2
Release For: Q4(p):2014Q4(r):2014Q1(p):2015Q1(r):2015Q2(p):2015Q2(r):2015Q3(p):2015Q3(r):2015

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