2018 Economic Calendar
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Productivity and Costs  
Released On 3/7/2018 8:30:00 AM For Q4(r):17
PriorConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR-0.1 %-0.1 %-0.5 % to 0.7 %0.0 %
Unit labor costs - Q/Q change - SAAR2.0 %2.2 %2.0 % to 2.5 %2.5 %

Highlights
Productivity in the fourth quarter is revised slightly to no change from an initial decline of 0.1 percent though the revision for unit labor costs is more tangible, now at plus 2.5 percent vs 2.0 percent initially. This reflects an upward revision to compensation now at plus 2.4 percent with hours worked, up 3.3 percent, and output, up 3.2 percent, both unchanged. A rising cost for labor relative to output is a negative for profit margins as companies, given lack of traction for selling prices, have to absorb the imbalance.

Consensus Outlook
Fourth-quarter output did rise at a 3.2 percent annualized compared to the third quarter, but it took 3.3 percent more hours to accomplish the increase. Given the lack of revisions in the second estimate for GDP, very little change is expected for the second estimate of nonfarm productivity, at minus 0.1 percent and unchanged from the first estimate, with unit labor costs at plus 2.2 percent vs an initial 2.0 percent.

Definition
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
 
[Chart]
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
 
 

2018 Release Schedule
Released On: 2/13/75/36/68/159/611/112/5
Release For: Q4(p):17Q4(r):17Q1(p):18Q1(r):18Q2(p):18Q2(r):18Q3(p):18Q3(r):18
 


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