The numbers: The productivity of American workers rose at a 4.7% annual clip in the third quarter, the government said Thursday.
Economists surveyed by the Wall Street Journal had projected a 4.3% decrease.
That’s the fastest rate since the third quarter of 2020.
Over the past four quarters, U.S. productivity has increased at a 2.2% pace.
Key details: Output in the third quarter rose 5.9%. Hours worked rose 1.1%.
Unit-labor costs, a key measure of wages, fell 0.8% in the third quarter, the first decline since the fourth quarter of last year.
Economists had forecast a 0.7% gain.
Year-over-year unit labor costs rose 1.9% in the third quarter, down from a robust 3.7% gain in the prior quarter.
Big picture: Productivity was hurt during the pandemic but has rebounded as the economy reopened.
High productivity has many benefits, including raising standards of living and keeping wage pressures from fueling inflation.
Some economists see an emerging higher productivity trend and this is will keep the Fed from needing to slow the economy dramatically to bring inflation down. Others think it is too soon to make any decisions about productivity growth. “The trend at this point is very, very uncertain,” said former New York Fed President Bill Dudley.
Market reaction: Stocks
DJIA
SPX
are set to open higher in the wake of Fed Chairman Jerome Powell’s press conference. The 10-year Treasury note yield
BX:TMUBMUSD10Y
has dropped to 4.66%.
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